Fibonacci Retracement Levels
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What are Fibonacci retracement levels?
Horizontal lines that indicate possible support and resistance levels where price could potentially reverse direction.
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When do Fibonacci retracement levels work best?
When the market is trending.
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What is the trading strategy for Fibonacci retracement levels in an uptrend?
Go long (buy) on a retracement at a Fibonacci support level.
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What is the trading strategy for Fibonacci retracement levels in a downtrend?
Go short (sell) on a retracement at a Fibonacci resistance level.
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Are Fibonacci retracement levels considered a predictive or lagging technical indicator?
They are considered a predictive technical indicator.
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What is the theory behind Fibonacci retracement levels?
After price begins a new trend direction, it will retrace or return partway back to a previous price level before resuming in the direction of its trend.
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What must you identify on a chart to find Fibonacci retracement levels?
The recent significant Swing Highs and Swing Lows.
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How do you apply the Fibonacci retracement tool in a downtrend?
Click on the Swing High and drag the cursor to the most recent Swing Low.
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How do you apply the Fibonacci retracement tool in an uptrend?
Click on the Swing Low and drag the cursor to the most recent Swing High.
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What are the common Fibonacci retracement levels?
0.236, 0.382, 0.500, 0.618, 0.764.
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Is the 50.0% Fibonacci ratio an official Fibonacci ratio?
No, it is not officially a Fibonacci ratio, but it is commonly used in technical analysis.
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Why do Fibonacci retracement levels often act as self-fulfilling support and resistance?
Because many traders watch these same levels and place buy and sell orders on them, their collective actions can impact the market price.
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How should Fibonacci retracement levels be viewed regarding price bounces?
Price won't always bounce from these levels; they should be looked at as areas of interest.
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Are Fibonacci retracement levels always simple to use?
No, they are not always simple to us
Note 
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