One of the best tools for technical analysis is the Fibonacci retracement. If you are not familiar with Fibonacci retracements, don’t worry. This tool is based on the Fibonacci sequence. When you multiply the Fibonacci numbers by the adjacent numbers, you will get the Fibonacci ratio numbers. The Fibonacci retracement software plots these ratios on the indicator chart. Before plotting the indicator, it is crucial to determine the highs and lows of the chart. The process of finding the highs and then plotting the chart can be a tiring task. Naturally, you are more likely to make mistakes, especially if you are not familiar with the indicators. Fortunately, we are able to use the automatic Fibonacci retracement indicator Mt4 free download.
The great thing is that it is an automatic Fibonacci indicator that can be used for all time frames and currency pairs.
What is the function of the Auto Fibonacci Retracement Indicator?
The Auto Fibonacci plots the retracement levels that lie between zero and 100%. If the market turns into a bearish mode, then zero is at the top and 100 is at the bottom, and vice versa. In essence, once the all-time high is reached, the market will tend to pull back to a different Fibonacci retracement level.
Let’s say an uptrend will be retraced to the 38.2% Fibonacci level. Just keep an eye on the market until it starts to rally to 38.2% of the market, then place a buy order. You can place a stop trade order below your swing high or just below the 50% Fibonacci level. In the case of an exit strategy, you can set your take profit at the next resistance level or at a higher level.
In many cases, the price can rise to the 50% Fibonacci threshold. However, 61.8% is favored by most traders because it is a huge retracement. 78.6% level is also a good reversal area, however, it is often overlooked.
In addition to trading retracements, the Fibonacci level is also a great opportunity to take profits when following a trend. In case the uptrend is pulling back, you can open a short position at the 68.1% mark and take profits.
Depending on your trade analysis depending on your trade analysis, you can enter the uptrend by placing a stop above the current swing high. The best place to exit is at the 78.6% level or the 100% Fibonacci level, which coincides with the next support level. Some traders also use Fibonacci extensions to take profits.
This automatic Fibonacci retracement indicator allows traders trading in the technical markets to quickly plot Fibonacci levels. It does not give exit and entry signals by itself. However, Fibonacci levels are good exit and entry points.