Boost your trading success with this simple trick
Boost your trading success with this simple trick
It's not rocket science. All crypto bots use it and you should too.
Prices naturally navigate towards these key levels:
Round numbers (thanks to human psychology)
Fibonacci levels (a fact of nature)
Previous support & resistance levels (history repeats)
Bots use them all the time and this is also why they work. Identifying these levels can significantly improve your chances of success.
Round numbers are pretty straightforward so I won’t focus on that here. Instead, I will expand on the last two points and particularly on finding Fibonacci levels.
Ready? Lets go! TLDR at the end.
To find your magic numbers, you’ll first need a TradingView account. If you don’t have one, use my referral - it’s free to have an account. Also follow me and check my crypto watchlist - it’s public and you can import it to your account.
The juicy part starts with this Bitcoin chart as an example. The detailed steps are under the chart.
Select the Fib Retracement tool in TradingView. You can find it in the menu to your left as shown below. Bookmark it (select the star) so it will appear in your quick menu in the future. Also switch to the weekly timeframe to make it easier to view the chart.
Find the all-time high (ATH) and lowest low (LL) points on the chart as indicated above, then hold down the CTRL key and hover the mouse over the chart. This activates the magnet feature so that you can easily pick the top & bottom levels of a candle.
Click on the ATH candle while pressing the CTRL key then drag down the Fib retracement to where the LL is. You should now see your levels like in the above chart (under #3). Easy right?
Now lets zoom in and take a look at Fib level 38.20% using the daily timeframe.
Notice how, initially, this Fib level acted as a resistance (#1), but after the breakout candle (#2) this level turned into a support (#3). Once bulls were convinced the new support holds (re-test), they rushed in to pump the price.
What this shows is that the breakout was confirmed by turning a previous resistance level into support. What today is a resistance, tomorrow it can be a support and vice versa. The same concept applies in a downtrend. A Fib level can act as support first, a breakdown happens and then acts as resistance next.
You can use a Fib retracement on any structure that connects any two points that you view as relevant, typically a high point and a low point. The other tool called a Fib extension is useful to find targets and key levels when you don’t have a lot of price history to work with.
Spotting your support and resistance levels is essential to know where you are on a chart. Using Fib levels is an easy way to do that. These levels are present on any timeframe, but the higher the timeframe (e.g. weekly) the more significant they become for the price action.
Bots and traders alike use these levels all the time. They work, in part, due to that as well. However, there are many instances where a key level is both a round number, a Fib level and acted as support or resistance in the past. These instances are called confluences and they increase your confidence in that particular price point.
Notice how Bitcoin’s ATH level on Coinbase was $69,000 sharp. More so, the 161.8% Fib level coincides with a price of 100k. If you are looking for targets to sell in this bull market, then using Fib levels is a great way to do that. To find all the Fib levels, just double click on one to open the settings menu where you can add and edit them.
Another great tip is to never buy under a major resistance. Wait for a clear breakout and re-test before going in. That will improve your chances. Remember that trading is about probability. There is never a 100% chance of success. Move the odds in your favor, that’s how you succeed long term.
What tools do you use to improve your rate of success? Share them below or drop by on our Discord to continue the discussion.
TLDR & Tips to Remember
Use Fibonnaci retracements to find key resistance and support levels
Seek confluences to position yourself well or to find targets
Prioritize higher timeframes (weekly and above), trust those levels more
Support and resistance always change sides and can turn against you
Trading is about probability, move the odds in your favor
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