The following technical analysis video for Nvidia Corp. shares shows that despite the bears looking good with the existing downtrend, bulls can start planning a series of purchases, and set buy orders at lower prices, as they aim for a reversal.
I invented this method that I haven’t seen anywhere else. I call it the ‘Fibonacci
Fibonacci
Fibonacci is a form of technical analysis in financial trading, named after the Italian mathematician, Leonardo Fibonacci, who lived during the 13th Century. He used a series of special ratios in his calculations, today called Fibonacci ratios, derived from the Fibonacci sequence, where each number in this sequence is the sum of the previous two numbers, resulting in the following series of numbers: 1, 1, 2. , 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, etc… (the formula is: fn = f n-1 + f n-2). Fibonacci ExplainedThe key Fibonacci ratio is achieved by dividing the last number by the previous number, or vice versa, e.g. (377 / 288 or 288 / 377) which gives 1.618 or 61.8 respectively, known as the golden ratio, from which other ratios are obtained. , as 23.6, 38.2. These ratios are used today in financial trading by making a Fibonacci study, and are a powerful tool in technical analysis. This form of trading refers to the fact that the price of an asset can react to Fibonacci ratios, and these reactions can be used to help traders make trading decisions. Just as price can react to traditional support and resistance lines, price can also react. to Fibonacci ratios. In particular, Fibonacci retracement levels are considered a predictive technical indicator because they attempt to identify where price may be in the future. In theory, once price starts a new trend direction, the price will revert or partially revert back to previous price. level before resuming in the direction of its trend. In its most simplistic form, Fibonacci retracement levels can be used by identifying significant swing highs and swing lows.
Fibonacci is a form of technical analysis in financial trading, named after the Italian mathematician, Leonardo Fibonacci, who lived during the 13th Century. He used a series of special ratios in his calculations, today called Fibonacci ratios, derived from the Fibonacci sequence, where each number in this sequence is the sum of the previous two numbers, resulting in the following series of numbers: 1, 1, 2. , 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, etc… (the formula is: fn = f n-1 + f n-2). Fibonacci ExplainedThe key Fibonacci ratio is achieved by dividing the last number by the previous number, or vice versa, e.g. (377 / 288 or 288 / 377) which gives 1.618 or 61.8 respectively, known as the golden ratio, from which other ratios are obtained. , as 23.6, 38.2. These ratios are used today in financial trading by making a Fibonacci study, and are a powerful tool in technical analysis. This form of trading refers to the fact that the price of an asset can react to Fibonacci ratios, and these reactions can be used to help traders make trading decisions. Just as price can react to traditional support and resistance lines, price can also react. to Fibonacci ratios. In particular, Fibonacci retracement levels are considered a predictive technical indicator because they attempt to identify where price may be in the future. In theory, once price starts a new trend direction, the price will revert or partially revert back to previous price. level before resuming in the direction of its trend. In its most simplistic form, Fibonacci retracement levels can be used by identifying significant swing highs and swing lows.
Entry’. Why?
Because when the price goes down, a Fibonnaci series of orders is set.
- 1 NVDA share is purchased
- Then 2 NVDA shares are bought at a lower price
- Then 3 NVDA shares are bought at a lower price
- then 5, 8, 13, etc…
- The length of the Fib streak is up to you. So is the entry prices (which, ideally, should match some logic on the price chart, according to the technical analysis, its pattern, price levels, etc).
I show a detailed example of this, and the key element of an average heavyweight entry price, so watch this video on NVDA technical analysis and trading idea:
Now, some people might see the massive selling in the stock market and Nvidia and call me crazy, a gambler. They say traders MUST go with the trend, must wait for confirmations, must watch the MACD or other indicator, wait for a catalyst. etc., etc. People say many things.
My answer is: There is more than one way to play this game. And it is, by no means, crazy. Crazy has a business plan that lacks a stop.
Or have one so bad, in terms of its reward versus risk and probability of winning, that it makes it look crazy. I’m not crazy by any means, in that sense.
In addition, I think that many traders who would expect too many confirmations with Nvidia stock or any other, in many (not all) cases, within a volatile phase of the market and not a tight bull market, are very exposed to being stopped when and if entering the business too late. This happens to non-professionals all the time.
Some professional traders have an approach that basically says:
“I buy NVDA stock ONLY if I get a great price. And drop what it is now. If I don’t get that price (doesn’t fill), then well, I missed the buy. I only get in after I get that great price .”
Some professionals look for more technical confirmations and can still win, and win big. No doubt about it. Again, there is more than one way to play this game.
In short, this analysis and trading plan shows 1 of many approaches and strategies to anticipate a move before it may or may not come.,
and casting a net of lower entry prices to average a great middle entry. By ‘excellent’ it means that it is much lower than the
current price and there is some idea of why the trade should work, according to the technical analysis at hand. ‘Great’ in no way means that the trade will win with 100% probability.
Like the idea of climbing in a possible Long (at your own risk) for this chip maker? ask for let me know your thoughts in the comments sectionwhere future updates may be provided as Nvidia stock moves along its timeline.
Visit ForexLive.com technical analysis for some interesting perspectives.
****** Typo correction in the above NVDA technical analysis video: The Fib series is 1, 2, 3, 5, 8, and then 13 (corrected by 11). So below are the updated entries and the average weighted entry, stop loss and take profit targets for the NVDA Long position. Of course, not all purchase orders can be filled and stay tuned for further updates.