Many times I’ve seen a trader with one Fibonacci retracement tool on a small timeframe and wondering why price is not reaching a level or seemingly turning at a empty space on the charts. The reasoning for this is that Fib levels are traded from many different timeframes all at the same time and its best to know where all the higher timeframe levels are especially when trading from a small timeframe of 1 hour.
The object is to start from a higher timeframe here so that the trader can be aware of where the higher timeframe support and resistance levels are. In this example Ill set up a chart and make an analysis of each timeframe before stepping down to the next lower one. What this can do is help you to gain a perspective of price movement so that you can be prepared once price begins to move and you will not be at a loss as to why your trades do not work out.
In this example I'll use the EURUSD which is currently the most commonly traded pair and is easiest to trade. We want to start with the weekly and determine if there is trending in the markets and what direction is of that trend. First lets separate the chart into recent trending movements and ranging periods. Figure 1 depicts the ranging periods
The object is to start from a higher timeframe here so that the trader can be aware of where the higher timeframe support and resistance levels are. In this example Ill set up a chart and make an analysis of each timeframe before stepping down to the next lower one. What this can do is help you to gain a perspective of price movement so that you can be prepared once price begins to move and you will not be at a loss as to why your trades do not work out.
In this example I'll use the EURUSD which is currently the most commonly traded pair and is easiest to trade. We want to start with the weekly and determine if there is trending in the markets and what direction is of that trend. First lets separate the chart into recent trending movements and ranging periods. Figure 1 depicts the ranging periods
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