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Originally Posted by deeZG I was always wondering why would fib levels work. Even regardless the fact of their accuracy I never even saw an explanation other than 'a lot of people look at them'. But, why have hey started looking at them in the first place? Is there anything measurable behind the concept? Never seen any thoughts about it (probably because of reading wrong things).
After this topic i come to the conclusion that there might be some math/psychology behind it. It now seems to me that they are functions of time that it took for price to make some move. Having... |
Technical players use tech levels to place their orders. Fundamental players use fundamental analysis but may still use tech levels to enter and exit their position. Other players may pay attention to tech levels because they know that tech players use them. So this all makes major tech levels attract orders and creates areas of concentrated liquidity which make the price bounce off of that level (depends on market conditions and strength of order flow). After the bounce the price may go further away from the level or break it - this depends on other things and has nothing to do with the level itself. Using this information alone you can create a profitable trading strategy.