XRP Fib Retracements Don't Work! Try Fib Extensions Instead...
Happy Thanksgiving Tradingviewers!
Have you ever found yourself late at night in front of your computer, giddy with the excitement over your favorite XRP correction? Seeing the RSI and MACD drop you witness the red candle bars drop lower towards your carefully drawn levels of Fibonacci retracement support and resistance. You set your your limit buy order in the books, give it a generous OCO take profit and a very minuscule stop loss because you just KNOW that price always bounces off those fib retracement levels.
However something is wrong. The price keeps dropping through your support level with no signs of slowing. Did you draw the high and low wrong? Is there some error in your technical analysis? Your stop gets hit and you sit there crying into your Kombucha as you see it suddenly reverse at an unknown support and take off for a hefty profit. What went wrong?
If you are like me, you have experienced a frustration with fibonacci retracement levels with XRP and all other tickers. For some reason they just don't seem to work consistently as reliable levels of support and resistance. I know this will incense fibonacci extremists who are slaves to this Italian dogma, but it is true. Look at the below chart and see how difficult it would have been to trade the past 3 years using these macro fib retracements levels.
The secret, I have discovered is NOT in the fib retracements BUT in the FIB EXTENSIONS! For some weird wild reason, price is attracted and repelled to these levels like a magnet. WAY more so than fib retracement levels.
Case in point XRP:USD on Kraken. As we draw point 1 at a high of $3.53 on 1/4/18, to a low of $1.99 on 1/5/18 to the next high on 1/6/18 it becomes very apparent that price is bouncing and repelling off of these levels all throughout the last 3 years years it has been correcting.
Fast forward to 11/26/20 and we see XRP is STILL using these levels as strong lines of support and resistance with a daily candle close at the 1.5 fib extension at .70$ on 11/24/20 and a bounce off support at .52$ on the 25th and 26th on the 1.618/1.65 ext. Look at this zoomed in 1 hour chart. How much money could you have made by playing the bounce on the 1.618/1.65 fib?
Since we barely pierced the 1.65 fib at .47$ and were rejected strongly I feel we will likely not go any lower. If we do, I see a washout low to .42$-.39$. Any lower will be the 1.786 fib at .26$ which will be back up the truck time!
Mid to long term take profit is at $1.46 at the 1 fib extension.
These fib extension levels will be the PRIMARY levels of support and resistance as XRP battles it way back up to all time highs.
I hope you enjoyed with analysis and I welcome all feedback positive and negative. If you like the knowledge I am dropping, please feel free to give me a little Thanksgiving cheer by clicking the blue coin bar at the top of this article.
Have a great Thanksgiving and Mahalo for reading it!
Have you ever found yourself late at night in front of your computer, giddy with the excitement over your favorite XRP correction? Seeing the RSI and MACD drop you witness the red candle bars drop lower towards your carefully drawn levels of Fibonacci retracement support and resistance. You set your your limit buy order in the books, give it a generous OCO take profit and a very minuscule stop loss because you just KNOW that price always bounces off those fib retracement levels.
However something is wrong. The price keeps dropping through your support level with no signs of slowing. Did you draw the high and low wrong? Is there some error in your technical analysis? Your stop gets hit and you sit there crying into your Kombucha as you see it suddenly reverse at an unknown support and take off for a hefty profit. What went wrong?
If you are like me, you have experienced a frustration with fibonacci retracement levels with XRP and all other tickers. For some reason they just don't seem to work consistently as reliable levels of support and resistance. I know this will incense fibonacci extremists who are slaves to this Italian dogma, but it is true. Look at the below chart and see how difficult it would have been to trade the past 3 years using these macro fib retracements levels.
The secret, I have discovered is NOT in the fib retracements BUT in the FIB EXTENSIONS! For some weird wild reason, price is attracted and repelled to these levels like a magnet. WAY more so than fib retracement levels.
Case in point XRP:USD on Kraken. As we draw point 1 at a high of $3.53 on 1/4/18, to a low of $1.99 on 1/5/18 to the next high on 1/6/18 it becomes very apparent that price is bouncing and repelling off of these levels all throughout the last 3 years years it has been correcting.
Fast forward to 11/26/20 and we see XRP is STILL using these levels as strong lines of support and resistance with a daily candle close at the 1.5 fib extension at .70$ on 11/24/20 and a bounce off support at .52$ on the 25th and 26th on the 1.618/1.65 ext. Look at this zoomed in 1 hour chart. How much money could you have made by playing the bounce on the 1.618/1.65 fib?
Since we barely pierced the 1.65 fib at .47$ and were rejected strongly I feel we will likely not go any lower. If we do, I see a washout low to .42$-.39$. Any lower will be the 1.786 fib at .26$ which will be back up the truck time!
Mid to long term take profit is at $1.46 at the 1 fib extension.
These fib extension levels will be the PRIMARY levels of support and resistance as XRP battles it way back up to all time highs.
I hope you enjoyed with analysis and I welcome all feedback positive and negative. If you like the knowledge I am dropping, please feel free to give me a little Thanksgiving cheer by clicking the blue coin bar at the top of this article.
Have a great Thanksgiving and Mahalo for reading it!
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