How to use Fibonacci as a Risk-Reward Calculator
February 3, 2020
We all know that Fibonacci is usually used to find potential turning points in the market by watching its retracements (23.6 , 38.2, etc…)
How about a way to use Fibonacci as a Risk-Reward Visual calculator?
Instead of calculating the distance between our entry and stop-loss, project and look for potential take profits levels to fit our RRR; we simply drag and drop Fibonacci.
In order to be able to use Fibonacci that way, we will need to tweak its settings.
Above is the default Fibonacci settings.
Simply edit its levels as shown above.
0 would be our Stop Loss
1 goes for the Entry
2 is for R1 where the distance from entry to R1 is equal to the distance from Stop Loss to entry
3 for R2 and so on…
Voila! Now we have a tool to visually calculate Risk Reward Ratio for our potential setups.
Make good use of it!