Fibonacci Retracement is based on the Fibonacci sequence (1,1,2,3,5,8,13,21...). Traders use it to identify potential reversal levels in pullbacks.
📊 Key Levels
- 23.6%: Shallow retracement — strong uptrend
- 38.2%: Moderate retracement
- 50%: Half retracement (not pure Fib but important)
- 61.8%: Golden Ratio — ideal pullback entry
- 78.6%: Deep retracement — last chance before reversal
🎯 How to Use
- Draw from swing low → swing high in uptrend
- Buy at 50-61.8% + reversal candle
- Stop loss below 78.6%
- Take profit at Fibonacci Extensions (127.2%, 161.8%)