Fibonacci Retracement levels correspond with percentage retracements that occur in the ebb and flow of a market trend. According to the Elliot Wave Theory, market trends tend to occur in five distinct waves. See the Elliot Wave for more information. Elliot asserted that these counter-trend waves will usually retrace against the trending waves by 38.2, 50 and 61.8 percent. These Retracement Percentages correspond to natural ratios discovered by the Greeks called the Golden Ratio and rediscovered by Fibonacci; a medieval, Italian Mathematician.
Interpretation
Commodity prices will frequently consist of an initial wave, a second wave (often retracing 61.8% of the initial move), the third wave (usually the largest), then another retracement, and finally the 5th wave (the last gap), which would exhaust the movement.
In Track 'n Trade Pro, you have three tools that you can use to apply these concepts: the Fibonacci Retracement, Fibonacci Time Zone and the Fibonacci Arc.
Back To Top
Fibonacci Retracement Tool
The Fibonacci Retracement tool is used to measure the different retracement levels within a market.
Drawing a Fibonacci Retracement:
1. Select the Fibonacci Retracement tool from the Toolbar.
2. Click on the chart where you would like the ruler to begin.
3. Move the mouse pointer to the lower right position of the ruler and click to place.
Resizing the Fibonacci Retracement:
1. Select the ruler by clicking on it. You can tell the ruler is selected when boxes appear on the corners of the drawing.
2. Click on one of the boxes to drag the select point and release the mouse button.
Moving the Fibonacci Retracement:
1. Select the ruler by clicking on it.
2. Drag to the new location and release the mouse button.
Deleting the Fibonacci Retracement:
1. Select the ruler by clicking on it and press the Del(Delete) key on your keyboard.
2. Or, right-click on the ruler and select "Delete" from the menu.
Right-click Menu:
Changing Properties for the Fibonacci Retracement:
Right-click on the ruler to view the Properties menu. Properties that can be changed are:
Foreground - Changes the line color of the ruler.Example of a Fibonacci Retracement in Track 'n Trade Pro:
Background - Changes the background color of the ruler.
Line Thickness - Changes the thickness of the ruler lines. Choose values from 1-6.
Font - Changes the Font, Size, Style, and Color of the values.
Show Text - Deselect/Select to view or hide the values.
Show Retracements - Select/Deselect to view the additional retracement percentages.
Show Prediction - Select/Deselect to view the additional prediction percentages.
Show Time Zones - Select\Deselect to overlay the Time Zones on the ruler.
Send to Back - Changes the layer of the drawing. This option is used when more than one drawing is in the same area of the chart. Click on "Send to Back" when you need to access a drawing under the Fibonacci Retracement.
Delete - Select to delete the tool.
Back To Top