Fibonacci Trading in Context

Let's go through what we've learnt so far about Fibonacci trading.

23.6 percent, 38.2 percent, 50.0 percent, 61.8 percent, and 76.4 percent are the major Fibonacci retracement levels to watch.

The 38.2 percent, 50.0 percent, and 61.8 percent levels, which are usually set as default settings in most forex charting software, appear to have the most weight.

Keep in mind that forex traders consider Fibonacci retracement levels to be potential support and resistance zones.

Because many forex traders keep a careful eye on these levels, the support and resistance levels may become a self-fulfilling prophesy.

Traders use Fibonacci extension levels to define profit objectives as potential support and resistance regions.

Because so many forex traders are following these levels and putting buy and sell orders to profit, self-fulfilling expectations can cause these levels to become the end of the trend move.

You'll need to find Swing High and Swing Low points in order to apply Fibonacci levels to your charts.

A swing high is a candlestick that has at least two lower highs on each sides of it.

A swing low is a candlestick that has at least two higher lows on each sides of it.

When used with other support and resistance levels, trend lines, and candlestick patterns for detecting entry and stop loss positions, Fibonacci tools may boost the likelihood of trading success.