Summary: Fibonacci Trading

Babypips Elementary - Grade 3

What are the most‐watched Fibonacci retracement levels?

38.2%, 50.0%, and 61.8%.

Name all common Fibonacci retracement levels.

23.6%, 38.2%, 50.0%, 61.8%, 76.4%.

What are the key Fibonacci extension levels used for profit targets?

38.2%, 50.0%, 61.8%, 100%, 138.2%, 161.8%.

What is a Swing High?

A candlestick with at least two lower highs on both the left and right sides.

What is a Swing Low?

A candlestick with at least two higher lows on both the left and right sides.

When applying Fibonacci in an uptrend, from which points do you drag the tool?

Drag from the Swing Low up to the most recent Swing High.

When applying Fibonacci in a downtrend, from which points do you drag the tool?

Drag from the Swing High down to the most recent Swing Low.

What is the general trading idea for Fibonacci retracements in an uptrend?

Buy (go long) on a pullback to a Fib support level.

What is the general trading idea for Fibonacci retracements in a downtrend?

Sell (go short) on a pullback to a Fib resistance level.

Why do Fibonacci levels often act as support or resistance?

Many traders watch them and place orders there, creating self-fulfilling reactions.

What does Method #1 suggest for stop placement?

Place the stop just past the next Fibonacci retracement level.

What does Method #2 suggest for stop placement?

Place the stop beyond the most recent Swing High/Low.

Which two other tools are commonly combined with Fibonacci levels for higher-probability trades?

Support & resistance zones and trend lines (also candlestick patterns).

What nickname does BabyPips give to candlestick signals that form at Fib levels?

"Fib Sticks" (Fibonacci candlesticks).

What is the objective of using Fibonacci extension levels?

To set potential take-profit (target) levels.

Which Fibonacci level is not an official ratio but is still widely used?

50.0%.

How can you increase the reliability of a Fibonacci signal?

Look for confluence with other tools (S/R, trend lines, candlesticks) and wait for confirmation.

What is the risk of placing stops just past the next Fib level?

A small spike can hit the stop before price moves in the anticipated direction.

Which Fibonacci extension levels acted as profit-taking zones in many examples?

61.8%, 100%, and 161.8%.

What is the main takeaway when using Fibonacci tools?

They highlight areas of interest, not guarantees—combine them with sound risk management and other analysis.