BTCUSD Retracement Trading
How Do I Use Trading Fibonacci in Bitcoin Trading?
A good bitcoin trading retracement strategy to use is the fibonacci retracement indicator. Fibonacci retracement indicator is used by many bitcoin traders as a bitcoin retracement strategy trading indicator tool.
The fibonacci retracement indicator is placed on a cryptocurrency chart and this Fibonacci Retracement indicator then calculates the retracement levels on the bitcoin charts.
Fib Retracement Strategy Examples on Upward BTCUSD Trend & Downward Bitcoin Trend
How to Trade Retracement on Upward Bitcoin Trend
In the Bitcoin Retracement Strategy example illustrated below the bitcoin price is moving up between chart point 1 & chart point 2 then after chart point 2 it retraces down to 50.0% retracement level then bitcoin price continues moving up in the original upward cryptocurrency trend. Note that this cryptocurrency retracement indicator is plotted from point 1 to point 2 in direction of the Bitcoin trend (Upwards Direction).
Because we know this is just a retracement based on our cryptocurrency chart bitcoin trend - using this retracement indicator, we put a buy order just between the levels 38.2% and 50.0% and our stop-loss just below 61.8% pull back mark. If you had put buy at this point in the trade example illustrated below you would have made a lot of pips after the bitcoin price retracement reached the Fibonacci 50.0% level and then continued moving in the original upward cryptocurrency trend.
How to Trade Retracement on Upward Crypto Trend - Crypto Retracement Strategy
Explanation for the Above BTCUSD Retracement Strategy Example
Once the bitcoin price hit the 50.0% retracement level, this retracement level provided a lot of support for bitcoin price, and afterward the btcusd trading market then resumed the original upwards bitcoin trend and continued to move upwards.
23.60% retracement level provides minimum support and is not an ideal place to set a bitcoin order.
38.20% retracement level provides some support but bitcoin price in this example continued to retrace upto the 50% zone.
50.00% retracement level provides a lot of support and in this example, this was the ideal place to place a buy bitcoin order.
For this Bitcoin Retracement Strategy example, the bitcoin price retracement reached the 50.0% retracement level, but most of the time the btcusd trading market will retrace up to 38.2% retracement level and therefore most of the time bitcoin traders set their buy limit bitcoin orders at the 38.2% Fibonacci retracement level, while at the same time placing a stop just below 61.8% Fibonacci retracement level.
How to Trade Retracement on Downwards Bitcoin Trend
In the Bitcoin Retracement Strategy example illustrated below the btcusd trading market is moving down between chart point 1 & chart point 2, then after chart point 2 the bitcoin price then retraces up to 38.2% retracement level then it continues heading downwards in the original downward cryptocurrency trend. Note that this cryptocurrency retracement indicator is plotted from point 1 to point 2 in direction of the Bitcoin trend (Downwards Direction).
Because we know this is just a retracement based on the cryptocurrency chart bitcoin trend we put a sell order at 38.2% retracement level and a stop loss just above 61.8% retracement level.
If you had put sell order at the 38.2% retracement level as shown on the trade below you would have made a lot of pips afterwards after the bitcoin price reached the 38.2% retracement level and then resumed the downward cryptocurrency trend.
In this trade the retracement of bitcoin price reached 38.20% retracement level & did not get to 50.00% retracement level. It is always good to use 38.20% retracement level because most times the bitcoin price retracement doesn't always get to 50.0% retracement level.
How to Trade Retracement on Downwards Crypto Trend - Crypto Retracement Strategy
Explanation for the Above Bitcoin Retracement Strategy Example
The above Bitcoin Retracement Strategy example is a cryptocurrency retracement trading setup where the bitcoin price retraces immediately after touching the 38.2% Cryptocurrency Chart Fibo Retracement Level.
This Bitcoin Retracement level provided a lot of resistance for the bitcoin price retracement, this was the best place for a trader to set a sell limit bitcoin order as the btcusd trading market quickly moved down after hitting this retracement level.
