Fibonacci-based moving averages: Examples on the daily charts.

I have been using Fibonacci-based moving averages on my charts almost as long as I have used the Wave (Raghee's Cycle Indicator) on my charts and on all my time frames.

The initial testing that I did before deciding upon the 34 EMA H/L/C had me experimenting with the Fibonacci series up to 144 and beyond.  The number beyond 144 were ruled out as they were to slow to be nimble enough market cycle indicators however I did keep the research on the 233, 377, 610, 987, 1597...all the way to the 6765 because of the dynamic support and resistance they consistently identified, especially on the daily chart.

Throughout my trading I have always incorporated Fibonacci in my trading mainly with the Wave and the Fibonacci retracements and extensions.  Fibonacci is a mathematical rule of nature, and it is that belief that has fueled my pursuit of these numbers.  But that certainly is not enough to stick with them.  The reason I do is because I see the levels these numbers help me project act as effective support and resistance levels time and time again.  It's that confirmation that created my confidence.

Since seeing is believing here are a few examples to take a look at.  Hopefully they will pique your curiosity and you will begin experimenting with these moving averages in your own trading.

Just as my Wave is made up of exponential moving averages, so are the other Fibonacci based moving averages on my charts.

Remember just like every trading indicator, these moving averages identify support and resistance.  It will be your strategy and the market trend that will dictate what you do with these "decision levels".

- Raghee

Comments

[St_Fx]

Hi Raghee,
Nice method, i dont know how can i put it on my chart but few question i want to ask,1. you use 6 moveing average to mentioning for 0,23,32,50,68,100% is this right, second about the market from your experience, chart that you post above shows test different percentages do this shows short term bottom and books any significant pull back or hit fibmoving avg.up side.
Thanks.

[Raghee Horner]

The exponential moving averages are the 144 period, 233, 377, 610,987, and 1597. You can even add the 55 and 89 period EMAs. You already have the 34 period EMA with the Wave.

Think of these as the Fibonacci support and resistance lines on your chart. For new traders that are still learning how to draw trendlines, support and resistance, this is an effective alternative.

Just as any support or resistance level, yes, these levels can identify ceilings and floors.

[Eric]

Raghee, Thank you for sharing this information with us. It's Fabulous!

[Raghee Horner]

Thanks for that Eric. I'll be doing more of this type of analysis (using Fibonacci-based MAs) here at the Chartology blog.