Fibonacci extensions have increased in popularity because many traders use them to look for targets farther away than the usual support and resistance points. Using these techniques, you can better judge where top indexes such as the AEX Index, might travel in the Dutch stock market when ranges are broken. Using Fibonacci extensions correctly allows you to picture future price moves based on previous highs and lows. On TradingView charts, you can easily adjust the chart and draw simple lines to practice this approach.
Fibonacci extensions depend on ratios from the Fibonacci sequence to pinpoint areas where the price might stop or turn after a trade move. Fibonacci extensions are different from retracements because they try to forecast the possible move of the market when the main trend begins again. With these projections, traders in Dutch stocks can make realistic goals and handle trades better, since they have a clearer sense of the best or worst cases.
You should locate three important points on the chart: the initial move, the move’s high and the low after that. Traders can chart out these levels by increasing them from the initial move by 38.2%, 50% and 61.8%. Such percentages mark places where the price could slow down or run into obstructions. Since investors respect these ratios, interest rates can ‘naturally’ rise or fall to those figures. Seeing how the AEX and other Dutch indices trade around these zones shows us about market trends and what traders think.
It is very easy to apply Fibonacci extensions with TradingView charts. Plotting these levels is easy on the platform using the drag-and-drop feature on any timescale from intraday to monthly. Because it is flexible, the currency market suits traders aiming for quick profits and those who prefer long-term investments. Having the ability to change the points with ease as well as seeing the levels update in real time makes it easier to track changes in the market.
Dutch traders can also review Fibonacci extensions together with other TradingView technical points, for instance, moving averages or volume profiles, to spot actual turning points. If an extension touchpoint corresponds to an important resistance or clustering spot in the past, it strengthens the importance of that spot. Various approaches often indicate a chance for market correction which helps traders protect their profits.
Besides setting targets, using Fibonacci extensions helps improve risk management. With clear profit zones set, traders know better what their profits could be and what their losses may be before trading. This area helps traders avoid deciding based on their feelings and support sticking to a well-thought-out plan. Due to Dutch indices being sensitive to worldwide news and reports, determining specific goal levels in advance lessens the uncertainty at uncertain times.
They also have educational value that puts them ahead of other types of extensions. For traders just beginning in the Dutch market or with technical analysis, using Fibonacci levels can help them better see how prices move and why they move that way. It teaches traders to use charts properly and recognizes why combining numbers from mathematics with the behavior of the market is important.
TradingView charts make it easy to see how Fibonacci extensions are applied to improve trading. As the app gives easy access to these levels and makes them visible, users are better able to make trades with confidence and higher accuracy. For Dutch index investors, this approach brings clearer expectations about the market’s movement and more certain targets for choosing the next move.
