Yes, professional traders use Fibonacci. There are many ways to combine Fibonacci nunmbers with different strategies. Below some practical examples of that.

1. Fibonacci Retracements

Probably most basic usage of Fibonacci’s tool. We measure previous move and draw Fibo retracement levels. They can work as support / resistance. Trades pay attention especially to 61.8% retracement levels.

fibonacci retracement example

2 Extensions

Simple extensions based on previous move. Traders pay mostly attention to 127.2% and 161.8% extensions. Other important extension levels are 138.2% and 200%.

fibonacci extension example

3. Expansions

Might seem similar to extensions but there is one important difference:

  • Fibonacci extensions are based on previous wave
  • Fibonacii expansions are based on previous wave and correction

In case of expansions traders pay attention mostly to 100% and 161.8% levels.

fibonacci expansions example

4. Harmonic trading

Harmonic patterns can give you a precise point of entry and exit. It takes some time to master them, especially for new traders.

Still, it’s good to know at least most basic ones such as:

  • Gartley
  • Butterfly
  • Bat
  • Crab

To spot and identify specific harmonic pattern traders use Fibonacci measurements.

5. Elliot waves

Elliot waves can give us a bigger picture. Price action is not just trend move, correction, trend continuation. We can split it into many different stages. I know that’s the most basic explanation of Elliot Waves in the world – if you want to read more check this article.

Still, Elliot waves counting is related with Fibonacci levels so there is another example where pros are using Fibos.

6. Trading robots

We can’t forget about trading robots which are responsible for more than X % of all trades in the markets. It’s not a novelty, it’s our reality. Many trading robots are using Fibonacci levels. Not only to open positions but also to hunt for stop losses. For example they know that retail traders will go long/short around 61.8% Fibo retracement so they place algo traps here.

Of course that’s a simple example. In practice there are many complicated algos based on Fibonacci’s levels.

To sum it up

It’s hard to list one main strategy based on Fibonacci used by professional traders. Fibo levels are used in many different ways. From simple cases as retracements to more advanced like harmonic trading. You don’t need to know it all but it’s good to learn the basics.

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