Fibonacci numbers are commonly used in discretionary trading for
calculating support and resistance levels.
There are two ways how they are used:
1. Fibonacci retracements
They show possible correction levels after an impulsive move. It uses
two points to measure the move from which the reaction levels are
caluclated.
This tool is already implemented in Neoticker.
2. Fibonacci Extensions:
Extension levels are used to determine possible price targets of a
move. Especially in Elliott Wave Theory there this method is used to
determine if possible targets of a price movement. Usually the initial
move is measured and fibonacci-multiples of this move are possible
price targets.
This requires to define starting (p1) and ending (p2) point of the
initial move and then the reaction level from where the next move of
the initial trend is supposed to start.
Since this tool is not implemented in Neoticker by default I created
this tool. As Neoticker offers many open programming interfaces it is
possilbe to create almost anything you want. You just have to work
through the interface structure.
The following example shows how to use the Fibonacci Extension drawing
tool. It's supposed that it's installed as custom drawing tool 1. For
more information on how to install it please go to the
installation page.
1. Open a time chart and press <F4> to make the toolbar show up:
2. Choose the custom drawing tool 1 from the toolbar and move to
the swing low.
With a mouse click the first point is selected. Move the mouse
pointer to the high of this first upmove while keeping the mouse
button pressed.
3. After you have selected the second point let the mouse button go
and move the cursors to the first reaction low.
( We have colored the Fibonacci Extension tool red to enhance
contrast.) As you can see there are atomatically extension levels
drawn as soon as the third point is selected.
To get exact calculation results we recommend opening the porperties
of the drawing tool by pressing the space bar.
4. Now you can snap the tool to exactly use the high and low points
to calculated the extension levels using the snap button.
You can also change the color of the tool or if the horizontal lines
should be extended or not if you want to.
5. By clicking the 'Horz' tab you can define which of the fibonacci
numbers should be used for calculating possible price targets:
After using the tool for the first time we recommend saving your
personal defaults by pressing the 'set defaults' button
6. The result shows now possible price targets based on fibonacci
extensions:
You can specify if the values and fibonacci numbers should be
shown or not. You have to modify the source code of the script and
reinstall it afterwards.
About -
Links - Contact
