Fibonacci Retracements are NOT Foolproof

Babypips Elementary - Grade 3

Do Fibonacci retracement levels always work?

No, Fibonacci retracements do NOT always work; they are not foolproof and can fail.

What is the main lesson from the example where Fibonacci retracement levels failed?

While Fibonacci retracement levels increase the probability of success, they don't always work; price may not reverse at a specific level or may ignore all levels entirely.

What is a common problem when using the Fibonacci retracement tool?

Determining which Swing Low and Swing High points to use, as different traders may have different interpretations or look at different time frames.

Is there an absolute right way to determine Swing High and Swing Low points for Fibonacci retracements?

No, there is no absolute right way, especially when the trend on the chart isn’t clear.

What is recommended to increase the probability of success when using the Fibonacci retracement tool?

Combine it with other technical tools in your forex toolbox.

What should traders remember about the market's behavior regarding retracements?

The market will not always resume its uptrend after finding temporary support or resistance; it may instead continue past the recent Swing High or Low