How to use Fibonacci Retracements ?
(Watch this video for a live trading session regarding fibonacci retracement
Let's talk about Fibonacci retracement levels.
Fibonacci retracement levels are horizontal lines that indicate the possible support and resistance levels where price could potentially reverse direction.
The first thing you should know about the Fibonacci tool is that it works best when the market is trending.
The idea is to go long (or buy) on a retracement at a Fibonacci support level when the market is trending UP.
And to go short (or sell) on a retracement at a Fibonacci resistance level when the market is trending DOWN.
Fibonacci retracement levels are considered a predictive technical indicator since they attempt to identify where price may be in the future.
The theory is that after price begins a new trend direction, the price will retrace or return partway back to a previous price level before resuming in the direction of its trend.
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