In technical analysis, Fibs is short for Fibonacci lines. Fibonacci retracement and extension lines are used in technical analysis.
Fibs are not specific to crypto, they are also popular among forex traders.
How to draw Fibs for an uptrend
When drawing Fibs for a bullish rally, start at the top of the advance and drag the Fib tool down to the point where the rally started.
This should give a Fib scheme with fib line labeled “1” at the top of the rally and fib line labeled “0” at the bottom.
In most charting apps, the default drawing just described will produce the retracement as well as extension fibs. For the basic lines no further tweaking of the settings is necessary.
- Fib Retracement: The lines between 0 and 1 fibs are your retracement fib levels. Legend has it that a retrace that falls no further than to 0.5 fib will resolve as a trend continuation.
- Fib Extension: The lines above 1 fib are your fib extension. Legend has it that’s where a lot of traders take profits.
Is there a scientific basis for fibs?
Do fibs work?
Automated Trading with Fibs
It is easy to set up a zero-attention trading set up with Fibs: use fibs for your stop loss and take profit orders.
For more complex strategies, set up an algo at Coinrule
Where to get Fibs
Ichimoku cloud is one of the default indicators available on TradingView, even with the free plan. You can find it in the public indicator library.
Read our list of tools for crypto traders for more free and freemium options.