Fibonacci retracement levels are some horizontal lines that indicate where a possible retracement of a price may occur.

Fibonacci was founded by a renowned Mathematician called Leonardo Pisano In 1202. I will not start discussing the history of Fibonacci as i believe anyone
reading this thread can research on that.

The Fibonacci retracement levels are associated with a single percentage point. These percentage points signify how much of a previous price impulse the price has currently retraced to.
Generally speaking, Fibonacci retracement levels are horizontal lines that indicate where a possible retracement of a price may occur in a chart. The Fibonacci retracement levels highlight some key areas of support and resistance to technical traders.
The Fibonacci numbers are;
- 23.6% (0.236)
- 38.2% (0.382)
- 50% (0.5)
- 61.8% (0.618)
- 78.6% (0.786)

Among this Fibonacci levels, some are tagged the FIB golden ratios. The reason is because price action reversals always occur are those levels, therefore most technical Analyst
Tend to focus more on those levels.
The golden ratios are;

23.6% (0.236)

38.2% (0.382)
and

61.8% (0.618)
HOW TO USE A FIBONACCI RETRACEMENT TOOL

When it comes to Technical Analysis and the general financial market, it is best to stick to what works for you. But with the help of research and feedbacks from other technical Analysts, I've come to discover that majority uses this
Pattern I'm going to show you.
To locate the FIB retracement tool, go to the tool bar of trading view or the exchange chart you wish to use.
Check the images below to find the Fibonacci retracement tool
There are two major points to draw the Fibonacci retracement, from point A(where the trend started) to point B(where the trend stopped).

The first image example below shows how to draw the Fibonacci retracement when in an uptrend. Your first tap will be on the candle body of
Point A (where the uptrend started), while you drag it up and drop it at point B (where the uptrend stopped)
To draw the Fibonacci retracement when in a down trend, consider the image example below. Once you pick the FIB tool, your first tap will be at point A(where the down trend started) to point B(where the down trend stopped)
If you look closely, you will observe that trend bounces of those golden ratios I previously talked about.
The lines drawn equally reveal to you Support and Resistance levels.

If you're trying to set up your Fibonacci tool for the first time, you'll notice your settings differ
From my own, that's because I've set it up in a way it suits me. I'll share image of my FIB tool set up below.
Then if you want your fib to extend your support and resistance lines, tick this box as indicated.
When price action moves in any direction, the beginning and the end of that move always start from the support where it bounces and stop at major resistance which may fall into any of the golden ratios. So you can take your entry once you observe a bounce of a support,
And set your take profit at a resistance level you identify from the previous trend.

Next up, we'll discuss Fibonacci extension when I find time.

I hope this helps someone out here today. Kindly like and retweet for others who are not following me to see and learn.✍️

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