Chapter 3 Swing high and swing low
To use the Fibonacci levels properly, we must first learn how to identify the co-called swing highs and swing lows.
A swing high is a high with two lower highs on the sides.
A swing low is a low with higher lows on the side.
When applying Fibonacci levels to a chart, these two points are where we need to place the tool’s anchors (1 and 0).
There are many swing highs and lows on the charts. When we decide which ones to choose for applying the Fibonacci levels, it is wise to pick the most obvious options - those that really stand out.
When it comes to choosing time frames, longer durations give us more reliable Fibonacci levels. However, this tool is often used for short-term trading, which means that shorter time frames are often preferred.
