Understanding Fibonacci Levels in Trading 📊
Fibonacci retracement levels are key support and resistance levels used by traders to identify
potential reversal zones in price movements. The levels are based on the Fibonacci
sequence and ratios like 0.236, 0.382, 0.5, 0.618, and 1.0.
📌 Fibonacci Levels in Your Chart
From your chart, here are the key Fibonacci retracement levels:
1️⃣ 0.5 (50%) - Strong S/R (Support/Resistance)
Acts as a midpoint retracement level.
Often tested in price corrections before continuation.
Trade idea: If price rejects this level, look for short entries. If price breaks above,
it signals potential continuation upwards.
2️⃣ 0.236 (23.6%) - Weak Support
A shallow retracement level.
Usually respected in strong trends.
Trade idea: If the price holds above, it's bullish; if it breaks down, expect a deeper
retracement.
3️⃣ 0 (100% Retracement) - Swing Low
The starting point of the Fibonacci retracement.
Trade idea: If price bounces off this level, it could indicate a reversal to the upside.
4️⃣ -0.13 & -0.27 (Negative Fib Extensions)
These are extension levels beyond the 0% mark.
Trade idea: If price falls into this zone, it might be oversold, and a bounce could
happen.
📈 How to Trade Fibonacci Retracement Levels
1️⃣ Buy at Key Support Levels (0.5, 0.236, 0)
Look for bullish confirmation (like price rejecting the level, bullish candles, or
volume increase).
Stop-loss below the level to protect from further drops.
2️⃣ Sell at Resistance Levels (0.5, 0.236 if price breaks down)
If price fails to break these levels, consider a short entry.
Stop-loss above the level to avoid fakeouts.
3️⃣ Breakout Strategy
If price breaks above a Fib level with strong volume, it could signal a trend
continuation.
Enter a trade on the breakout and retest.
🔥 Trading Example Based on Your Chart
Price is currently between 0.236 and 0.5 Fib
If price breaks 0.5 → Bullish continuation to 1.0 Fib
If price rejects 0.5 → Look for short trade targeting 0.236 or lower
🚀 Pro Tip:
Combine Fibonacci with candlestick patterns, volume, RSI, and MACD for stronger trade
confirmations!
Let me know if you need help setting up a full strategy! 🔥
