Fibonacci retracement levels are depicted by taking high and low points on a chart and marking the key Fibonacci ratios of 23.6%, 38.2%, 61.8% horizontally to produce a grid. These horizontal lines are used to identify possible price reversal points.
How do you use Fibonacci retracement?
The most popular Fibonacci Retracements are 61.8% and 38.2%. Note that 38.2% is often rounded to 38% and 61.8 is rounded to 62%. After an advance, chartists apply Fibonacci ratios to define retracement levels and forecast the extent of a correction or pullback.
What is Fibonacci retracement in forex?
In Forex trading, Fibonacci retracements can identify potential support / resistance levels. ... From a trading perspective, the most commonly used Fibonacci levels are the 38.2%, 50%, 61.8% and sometimes 23.6% and 76.4%.
How do you use Fibonacci extensions?
In an uptrend, the general idea is to take profits on a long trade at a Fibonacci Price Extension Level. You determine the Fibonacci extension levels by using three mouse clicks. First, click on a significant Swing Low, then drag your cursor and click on the most recent Swing High.
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[source: investopedia]
By — Pinoy Forex Trader