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But Can you see. Can you see that i have a dotted, line over here, right i have a dotted, line. And that dotted line is is like is what you call your fibonacci, trend line, right and it's supposed to be. Price needs to follow this trend line, very closely, for it to be accurate. What do i mean by that is that in this example, right price follows the trend line very, closely, and hence, the retracement, is good it's you know it is effective. Right, however. However, if price, you know if you draw a fibonacci, retracement. Someone say you know droid from a high to a low. Right you draw it from here all the way to here. Now. What is wrong with this fibonacci, retracement, you see that initially. It looks like price is kind of you know moving quite closely with it, then out of nowhere, right there is this massive. Spike. Right and and you see the distance. You know well the distance, of price. Over here, from the from from your trend line. Right the distance, is so huge. And because of this, your fibonacci, retracement, will not be effective. Right whether it's your retracement, or whether it's your extension, right what you want to do is to always. Draw it very closely. Enjoy it very closely to your, um, to price, the closer, it is to price the better you obey the structure. Of the market the more effective. Your fibonacci, retracement, is, all right. So, anyway, trying not to deviate too much, right this is what i call. Um as unclear, market structure. All right and, this is what i clear. This is what i mean by clear market structure. So the, the, you know you can you can see like what i drew earlier you know the the. The way the market moves it's just very very, it's very clean. Right you get very strong little zigzags. Here and there, right and one of the tricks actually one of the tricks to get this is if you're looking at a market like this and, usually, on the lower time frames. Maybe like the five-minute, charts. I don't know i'm sorry. I guess the five-minute, charts, it might look very messy. Right it might look, very messy. But if it looks messy on a five-minute, chart, right you can you what i tend to do is i tend to take a step back. Zoom out a bit zoom out a bit and you get to see a clearer market structure, so on the five-minute, charts it wasn't clear but on the 30 minutes you're seeing much more structure. Right so usually in this kind of cases, right um. What can really help right if i can if i can find an example over here. The. Let me see i can find. Yeah like yeah euro, singh.

So Sometimes. Like you look at the end there's less of that crazy, kind of weeks. That you see, and that is because cat yen you know naturally, um. The yen currency pairs tend to be, less. Tend to fluctuate, less. Right um because, uh. It's, hard to give a reason, right but you'll notice that it tends to fluctuate. Um, it doesn't tend to be as well as something like like euro aussie. Where literally, you know every single corner every single turn is a big, wick that you see. All right. So, once again don't want to digress too much but some things you need to take away, from this is that if it looks too messy on the lower time frame try to try to increase your time frame, right try to look for the um try to go for higher time frames one hour four hour to better see the structure of the market. Right and, and yeah you know um. Usually, the for the higher. Uh for the higher time frames it starts to be okay to look at different currency, pairs, the majors the miners. Right, um what that what you probably want to stay away from, are stuff like you know and you're also if you look on something like. A dollar ringgit, right. I guess oh. Yeah that's terrible. Maybe, um dollar cnh. Dollar signage is actually pretty okay. Right but, so, what what i what i'm very afraid of are stuff like this. Right like this, this spike down here. Right i'm always very worried when i see a big spike. Right because, spikes. Basically. Mean that it's um. Different brokers different price fee. Right, one uh you know. For this case this broker's, price feed might be over here the spike might end over here, another spike might end a little bit higher and i'll spike my end a little bit lower, right and all of that affects the accuracy, of your fibonacci, retracement. Right so every time you see something like this a big spike, right always. Be careful, right especially the spikes are very very big, right you know you um in this case right i like this, right. Very small spike on top very small spike below, right you can see how price tend to uh obey you know touch 23, touch 38, touch 50, it obeys it slightly better. Right you need clear market structure you need less room for ambiguity. Okay. Now all these, important things to take note of, right i'm not even halfway through and we're almost halfway through the, webinar. Um. Um so we have a question from imat. Nice to see you again iman, all right, uh, does fibonacci, retracement, work best in trending, and ranging markets, but not choppy markets.

All Right. Now. Um back to my topic. Uh, on yeah when drawing fibonacci, retracements, you'll notice that there's the there's a portion in the middle, that is 0 to 100, those that are beyond 100 and those that are below. Are negative. Right so, then the negative region. How does this work. Okay, let me, maybe, um. Let me, see if i can. I can i can highlight this to you guys. All right and i'm gonna use the highlighter instead, all right so this is our starting point over here remember, i said this is our starting point. And this is our ending point, right so we drew a fibonacci, retracement. This way. Okay. Um yeah this way. What, exactly, is a fibonacci, retracement. Okay, assuming. Assuming, from my starting point over here, from my starting point over here, to my ending point over here. Right assume that this is 100, pips okay i'm just going to change my, you know i can't change the color of my highlighter, but yeah assuming this is 100, pips. Okay. From my starting, point, all the way to my ending point. Right this is. Let's just assume this is 100, pips. Okay. And, and um. And what does a 50. Retracement, mean. Right a 50, retracement, mean right, over here. It means that, price would have. You know, from the ending point it would have climbed climb climb all the way up to 50. That means, price would have moved up. 50 pips. Fibonacci. Retracements. Is basically, like dividing. Right. What is 23.6. This is 23.6. Pips, assuming, this you know you're starting to your ending point is 100, pips. Right 50. Is your midway point 61.8. Is well. You know price had moved 61.8. Percent of it and yeah so that is essentially, what fibonacci, retracement, is about, right, and once it goes beyond, you know you reach, 71.78. It reached 88. And once you reach 100. What does it mean. It means that, your starting, point. To your ending point, price basically. Did what you know a v shape right it come all the way down. And it come all the way up, so it retrace, a full 100. So that is what it means when it retraces, a full 100. Then that, helps you understand. What it means when it retraces, 127. That means it goes, even beyond the 100. And it goes all the way up to 127. So this is where it gets a little bit. A little bit crazy. Right that means you you need to look at price that okay i can not only, retrace, all the way, you know to my, 23.