Hubert Senters here.
Let’s take a look at what is a fib or a Fibonacci and how to properly use them. So in TradeStation it is called a Fibonacci price retracement line. And some other platform it may be called something else.
Trader swing we all use it and call it Fibs. So all of this is a mathematical relationship if you’re drawling something from point one to point two. And this is going to give you a mathematical ratio.
If it go from zero $23.6 or some people will round it to $24, $38.2, $50, $61 and $100 so you’ll drawl from here to here or from there to there. So let’s back out it here. Let’s grab Apple in this example.
In this case scenario, let’s say that you’re wanting to buy a pullback on Apple. First, we go to figure out what ratio pullback you want to buy. So for me and I’ll go through this in another video.
I use the 50 percent but in this case scenario let’s say that you want to buy a substantial pullback. First you have to figure out where you’re going to drawl it from. I’m going to do this in this video and we’ll do another follow-up one.
So I’m going to go from here from the bottom, click one time and drag up all the way to the up so what I would want to do based upon on this low and that high I would like to see Apple drop down here so I could buy it in this weak spot zone of $291 to $293.
Now, you can move up and you could go like this. I want to go from here to there. And in this case scenario that would be a perfect ambush trade. I’m going to do another follow-up video tomorrow.
This would be a long. So in other words, we’re drawling from point one to point two pullback. I’m going to be a buyer here. And I’m hoping that in the future it goes up after I buy it. Next video I’ll cover a short.
Good luck. Hope it helps. See you on the next video.