Friday, August 21, 2009


We usually use Fibonacci Retracement levels as Support & Resistance.

Fibonacci Retracement Levels
0.236, 0.382, 0.500, 0.618, 0.718

Fibonacci Extension Levels
0,0.382, 0.618, 1.000, 1.382, 1.618

Since so many traders watch these same levels and place buy & sell orders on them to enter trades or place stops, the support & resistance levels become a self-fulfilling expectation.

Fibonacci Retracement

In an uptrend, the general idea is to go long the market on a retracement to a Fibonacci support level. In order to find the retracement levels, you would click on a significant Swing Low and drag the cursor to the most recent Swing High.

The same way if the market goes to a downtrend, you should drag your mouse from Swing High to Swing Low.


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