Fibonacci & Multi Time Frames (part 16)

Hi traders,

Did you ever wonder if you can use the Fibonacci tools on multiple time frames (MTF)?

Then you find the right article because here you will learn how to use the Fibonacci tool on MTF.

This is the 16^th part on our Fibonacci series, which is also the last article on the topic of Fibs.

FIBS & MULTIPLE TIME FRAMES

Using various Fibonacci levels on multiple time frames (MTF) is a strong concept for trading because it allows traders to locate and examine multiple Fib levels in the same price zone.

For instance, a trader who is analyzing the 60 minute chart could find a 61.8% Fibonacci particularly interesting for a bounce and trend continuation. More confluence is achieved on multiple time frames if on a 15 minute chart that zones matches with a 78.6% Fibonacci level.

RETRACEMENT & TARGET FIBS

This principle is valid for both retracement fibs and target fibs, or any combination of them. In fact, there could be multiple Fib retracement levels and Fib targets aligning themselves from multiple time frames.

The example below shows how 1x Fibonacci retracement level from a 1 hour chart shows chart confluence with 2x Fibonacci target levels from the 15 minute chart. A total of 3 Fibs from 2 time frames indicating a strong confluence zone of support and indeed, price made a very nice and strong bounce.

(The continuation of the up move was driven by the FOMC and the lack of a rate hike in the US but the bounce happened well before the event)

CONCLUSION: finding various support and resistance Fibonacci levels on multiple time frames is a great method of assessing how strong or weak a price zone will be and helps us traders assess the odds of a bounce at the Fibs or a break of the Fibs occurring.

Before leaving, make sure to read our entire Fibonacci series!