What are the differences between fib extension and retracement in the context of cryptocurrency trading?

3 answers

• Dec 16, 2021 · 3 years ago
  Fib extension and retracement are both important tools in technical analysis for predicting price movements in cryptocurrency trading. Fib extension is used to identify potential price targets beyond the current trend, while retracement is used to identify levels where the price is likely to reverse or consolidate. Fib extension is calculated by extending the Fibonacci sequence beyond 100% to project future price levels. On the other hand, retracement is calculated by drawing horizontal lines at key Fibonacci levels (such as 38.2%, 50%, and 61.8%) to identify potential support or resistance levels. By combining these two concepts, traders can gain insights into possible price targets and areas of price reversal, which can help inform their trading decisions.
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• Dec 16, 2021 · 3 years ago
  Alright, let's break it down. Fib extension and retracement are two popular tools used by traders in the cryptocurrency market to predict price movements. Fib extension is all about projecting future price levels beyond the current trend. It's like looking into a crystal ball and saying, 'Hey, this is where the price might go next!' On the other hand, retracement is about identifying levels where the price is likely to bounce back or take a breather. It's like finding those sweet spots where the price might reverse or consolidate. So, in a nutshell, fib extension is about looking forward, while retracement is about looking back. Both concepts are based on the Fibonacci sequence, which is a mathematical pattern found in nature and financial markets. By using fib extension and retracement, traders can gain a better understanding of potential price targets and areas of price reversal, which can be valuable in making trading decisions.
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• Dec 16, 2021 · 3 years ago
  Fib extension and retracement are two concepts that play a significant role in technical analysis for cryptocurrency trading. While both are based on the Fibonacci sequence, they serve different purposes. Fib extension is used to project potential price targets beyond the current trend. It helps traders identify levels where the price might reach in the future, based on historical price movements. On the other hand, retracement is used to identify levels where the price is likely to reverse or consolidate. It helps traders find potential support or resistance levels, where the price might bounce back or take a break before continuing its trend. These concepts are widely used by traders to analyze price charts and make informed trading decisions. Remember, it's important to use these tools in conjunction with other technical indicators and market analysis to increase the accuracy of predictions.
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