This image is a handy "Fibonacci Cheat Sheet" for financial traders. 📈 It simplifies a popular technical analysis tool used to predict potential price levels in the market.
The guide outlines three main rules:
Identify the highest (Swing High) and lowest (Swing Low) points of a price move.
Draw the Fibonacci tool from the start to the end of that move.
Watch the key levels!
The sheet highlights two important sets of levels:
Retracement Levels (like 38.2%, 50%, 61.8%): These are zones where the price might pull back to before continuing the main trend. Think of them as potential support or resistance areas. 📉
Extension Levels (like 138.0%, 161.8%): These are potential profit targets if the price moves beyond its original high or low. 🎯
It's a powerful tool for traders to time their entries and exits, but as the image notes, trading always carries risks! ⚠️