There are some key Fibonacci retrenchment levels that you must remember. This includes 23.6%, 38.2%, 50%, 61.8%, and 76.4%. From this list the important ones are 38.2%, 50%, and 61.8%. These important levels are included by default in the Fibonacci retrenchment software.
In case, your trading software doesn’t support any Fibonacci tools, then there is nothing to worry about. We have designed Fibonacci calculator for this purpose.
The Fibonacci retrenchment levels are being used by the traders as a part of resistance and support levels. Since, a majority of traders are using the same technique to sell or buy orders on the basis of which they either enter in a trade or make their stops. As a result of resistant and support levels, this technique really becomes valuable.
The most important Fibonacci extension levels are as follow: 38.2%, 50%, 61.8%, 100%, 138.2%, and 161.8%.
Extension and support levels are being used by the traders to set a target profit. Once again, as a majority of traders are following the same path to sell or buy then this technique becomes very valuable for everyone. It brings the results as expected.
To insert the Fibonacci levels effectively, a trader must be familiar with Swing high and low points.
Swing high works like a candlestick which contains a minimum of two inferior highs on the right and left side.
Swing low work like a candlestick that contains a minimum of two higher lows on the right and left side.
Using the Fibonacci tools can increase a trader’s chance of winning through resistance levels, candlestick patterns, and trend lines for making an entry or stop.
