 What is going on ladies and gentlemen and welcome back to Bitcoin daily? I am Jay and today we are going over the Fibonacci Fibonacci sequence and Fibonacci Retracement and how to use it when trading This is a very common tool that's used in technical analysis To find support and resistance levels So this will be something cool to learn and to incorporate into your technical analysis and trading I use this very often when looking for entries and stuff like that So I'm gonna show you guys how to use it how it works a little bit of history behind it and That's basically it All right, you guys just jump right into it How to use Fibonacci? So the first thing is who was Fibonacci? Fibonacci was an Italian mathematician from the Republic of Pisa Considered to be the most talented Western mathematician of the Middle Ages Fibonacci popularized the Hindu Arabic numeral system in the Western world primarily through his composition in 1202 of Liber Abachi or Book of calculation. He also introduced Europe to the sequence of Fibonacci numbers Which he used as an example in Liber Abachi So what are Fibonacci retracement levels in trading Fibonacci retracement is a method of Technical analysis for determining support and resistance levels. They are named after their use of the Fibonacci sequence Fibonacci retracement is based on the idea that markets will retrace a predictable portion of a move After which they will continue in the original direction Fibonacci retracement levels connect any two points that the trader views as relevant Typically a high point and a low point each level is associated with a percentage The percentage is how much of a prior move the price has retraced the percentage levels provided are Areas where the price could stall or reverse the Fibonacci retracement levels are 23.6 percent 38.2 percent 61.8 percent and 78.6 percent while not officially a Fibonacci ratio 50 percent is also used However, remember that these levels should not be relied on exclusively There is nothing to calculate when it comes to the Fibonacci retracement levels They are simply percentages of whatever price range is chosen However, the origin of the Fibonacci numbers is Fascinating they are based on something called the golden ratio Start a sequence of numbers with zero and one then keep adding the prior two numbers to get a number string like this The Fibonacci retracement levels are all derived from this number string After the sequence gets going dividing one number by the next yields 0.618 or 0.7.8 percent divide a number by the second number to its right and the result is 0.382 or 38.2 percent all the ratios except for 50 percent since it's not an official Fibonacci number are based on some mathematical calculation involving this number string interestingly the golden ratio of 0.618 or 1.618 is found in Sunflowers galaxy formations shells historical artifacts and architecture You can even find it on our dear president So what do Fibonacci retracement levels tell you Fibonacci retracement levels can be used to find entries Determine stop loss levels and set price targets. For example, let's take a look at this Bitcoin chart These green horizontal lines represent each Fibonacci level if we look on the left We will see the twenty three point six percent thirty eight point two percent fifty percent sixty one point eight percent and seventy eight point six percent levels You will notice that I started this at the low point and extended it to its highest point I've been using these Fibonacci levels to find support and resistance levels Which in return helps me find good risk reward grades Let's take a look at how the price has been responding and reacting at each of these price levels So we take a look over here This is where we started the move and then this was its highest peak So we take the Fibonacci retracement tool We started down here and we take it all the way up here to the ties peak Then we start looking for different areas of the retracement where we could find some support and resistance and plan our trades accordingly So as you can see here once it started taking taking off back down The price reacted at this first level which is twenty three point six percent So there was a lot of price action going on there before it violated that support Once it violated that support it dropped down and look at this look exactly where it bounced it bounced at the thirty eight point two percent zone so that made it the price go right back up and As as it hit the twenty three point six percent zone again We had a little bit more price action here You see how this was kind of indecisive it kind of bounced back and then we were able to Violate it and go up. So after breaking out though. This kind of was a fake break out It dropped her right back down we violated that price again So that's where you get the big red one, but we hit right here right at this thirty eight point two percent We bounced yet again. It moved back up a little bit once it opened on the next one the next day it we completely violated that and We just went all the way down So after a few days of bouncing you'll see the range that it's bouncing It's literally bouncing right in between two Fibonacci levels, right? So we're looking at the seventy eight point six percent and the sixty one point eight percent levels The this the Bitcoin was trading in this range So during this time me and my team we were taking trades in this range We're taking scalps were entering trades as close to ninety eight hundred as possible So anything in the ninety eight hundred zone we were buying up and then we're taking profits at the ten thousand So around ten thousand and ten thousand two hundred to three hundred we were is where we were taking profits Once it we reach this zone again, you'll see all this price action that started happening before a breakout occurred notice on the breakout we topped off at this Fibonacci level of fifty percent, which is also ten thousand seven seven So you'll see you saw some price action there and Then we broke out through that once we hit that breakout then notice the next resistance thirty eight point two percent again So we've met back up with this thirty eight point two percent that gave that served as a support on these in this side It served that support here and it served as a resistance and support here now since we're here again at This level it is now serving as a resistance, which is why we got rejected here And it took us right back down to this level of sixty one point eight percent So currently we're at the sixty one point eight percent and as you can see here The price has been holding here and bouncing back up prices currently at ten thousand five hundred So a good entry would be here at ten thousand around ten thousand four hundred That is around the price that you would want to enter and then your target would be around ten thousand eight hundred or Ten thousand seven sixty nine is the exact number But remember these are always zones. They are never exact numbers. They're just a zone. All right So if you look here the way I would set up my trade is I would enter at ten thousand four hundred I Would probably put a stop loss around fifty dollars to eight hundred dollars Away from where my entry price is so that gives me a stop of around probably ten thousand three hundred Or three dot ten thousand three hundred and fifty And then my target is gonna be right up here, which is around ten thousand eight hundred level So that is exactly how I would use the Fibonacci levels to plan out my trade Fibonacci levels also arise in other ways within technical analysis for example, they are prevalent in Gartley patterns and Elliot wave theory after a Significant price moving up or down these forms of technical analysis find that reversals tend to occur close to certain Fibonacci levels Fibonacci retracement levels are static prices that do not change unlike moving averages These levels are always a point of interest where some price action is expected either a reversal or a break Alrighty guys, I hope you guys enjoyed this video. I hope you got a lot out of it and you really It helped you really understand how Fibonacci works how the Fibonacci retracement tool works And how you can use it to your advantage to give yourself an edge when you're looking for a trade And that's pretty much it guys. That is a video for today Let's go ahead and move my face out the way so we can do the question of the day So as you guys know every video, we will have a random question about something in the video Question is always something random in a random area of the video find the question and find the answer Post your answer in the comments for a chance to win a three months membership to our trading room Winners will be picked randomly once the video receives over 30 likes this number changes as we grow good luck guys so question of the day is Which level in the Fibonacci retracement tool is not an official Fibonacci number. Alright guys, that is it. I appreciate you guys Appreciate the support. Make sure to please subscribe hit the follow button hit the like on all the videos And that's basically it man. We will see you guys tomorrow. I am out. Peace and love