Fibonacci Channels work similarly to parallel channels. However, they are best used on a higher time frame.
Using the Fibonacci levels you would use when applying the retracement tool, the Fibonacci channel will produce support and resistance lines.
It is not recommended to trade off these lines alone, but rather use them with additional confluence to support a high probability trade setup.
When applying the Fibonacci Channel tool, it may be helpful to turn on the magnet feature to line up the highs to the low.
Remember with Fibonacci Extension channels, always look for validation on these channels. If levels 0 and 0.618 are not respected with price action, then consider the channel invalid.
Time Stamps
2:37 – ONT Previous COTW (DO NOT TRADE THIS)
- You see where the confluence is when you pull a few fibs from different places
11:54 – FIBONACCI CHANNELS
- Use only on HTF, it is best used on a long term
- Start on the high and connect series of the highs (second click) and the third click is on the low
- If fibs are not respected, it is not a valid channel
- If it is respected you use it over the classic channel
18:46 – FIBONACCI EXTENSION CHANNELS
- Best on HTF (4H+) but never under 1H TF
- Connect the high (peak), to low (valley), to secondary high (peak). On the second peak, there should not be any other touch
- If 0, 0.618 and 1 have no respect, it is not valid
- Fibonacci Extension channel levels:
- 0
- 0.618
- 1
- 1.618
- 2
- 2.618
- 3.618
- 4.236
34:08 – FIBONACCI LONG TERM CHANNELS
- Use it on at least 1D TF
- If you look at 1-year data and it is extremely volatile log scale is extremely helpful because you can see all the movement
- You can adjust the channel if the break is not convincing
- Even if you move outside of the channel sideways, it is bullish (sellers drying out) BUT you have to make it to at least 0.382
- Log scale works better on the HTF
- Levels:
- 1
- .75
- .5
- .25
53:38 – BTC TA and Q&A