Generally, traders should use only one set of fan lines if there is only one trend being analyzed. However, if more than one trend is present, additional sets of fan lines can be applied.
The first set of fan lines is applied to the major uptrend and the second to the secondary downtrend (countertrend) on the daily EUR/USD chart. The intersections between the fan lines going in divergent directions can provide confirming support and resistance areas.
Fibonacci fan lines can offer earlier signals than standard horizontal retracement levels, and the two methods used in conjunction can identify stronger support and resistance levels. Also, because the marketplace has yet to use this method much, fan line levels will generally not be subject to stop-loss hunting as standard lines.
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