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

3 answers

• Dec 16, 2021 · 3 years ago
  Fibonacci extension and retracement are both popular tools used in technical analysis for cryptocurrency trading. Fibonacci retracement is a method used to identify potential levels of support and resistance based on the Fibonacci sequence. Traders use retracement levels to determine where the price of a cryptocurrency might reverse or continue its trend. On the other hand, Fibonacci extension is used to identify potential levels of price targets or resistance beyond the current price trend. It helps traders to set profit targets or identify potential areas of price reversal. While both tools are based on the Fibonacci sequence, they serve different purposes in analyzing price movements and making trading decisions.
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• Dec 16, 2021 · 3 years ago
  Alright, let's break it down. Fibonacci retracement is like a detective trying to find clues in a crime scene. It helps traders identify potential levels where the price might bounce back or reverse. These levels are based on the Fibonacci sequence, which is a series of numbers where each number is the sum of the two preceding ones. Fibonacci extension, on the other hand, is like a treasure map. It helps traders identify potential price targets or areas of resistance beyond the current trend. By using these tools, traders can make more informed decisions and set realistic profit targets. So, in a nutshell, retracement helps you find potential support or resistance levels, while extension helps you set profit targets or identify areas where the price might reverse.
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• Dec 16, 2021 · 3 years ago
  Fibonacci extension and retracement are two important concepts in cryptocurrency trading. Fibonacci retracement is a technique used to identify potential levels of support and resistance based on the Fibonacci sequence. Traders use retracement levels to determine where the price might reverse or continue its trend. On the other hand, Fibonacci extension is used to identify potential price targets or areas of resistance beyond the current trend. It helps traders set profit targets or identify areas where the price might reverse. Both concepts are widely used by traders to analyze price movements and make trading decisions. If you're interested in learning more about Fibonacci extension and retracement, you can check out BYDFi's educational resources for in-depth tutorials and examples.
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