🔹 What is Fibonacci Retracement?
Fibonacci is one of the most powerful tools in technical analysis, used by traders to identify:
- Potential support and resistance levels.
- Ideal zones for entry and profit-taking.
- Possible price reversal points.
Based on the famous Fibonacci sequence (0, 1, 1, 2, 3, 5, 8...), key levels used in trading include:
0.236, 0.382, 0.5, 0.618, 0.786, and extensions like 1.236, 1.382, 1.618.
🎯 Why Should You Use Fibonacci?
✅ Helps you predict pullbacks during strong trends.
✅ Allows precise entry after a correction.
✅ Sets realistic profit targets and stop losses.
✅ Works well with candlestick patterns and support/resistance.
🛠️ How to Apply Fibonacci (Example):
1. Open a chart (e.g., #SOLUSDT 4H).
2. Select the Fibonacci Retracement tool in TradingView.
3. Draw from the recent low to the high (if in an uptrend).
4. Observe the retracement levels – for example:
- 0.618 or 0.786 often act as strong buy zones.
- 0.236 or 0.382 can act as minor resistance during rebounds.
📊 Example:
If SOL went from $120 to $160, a 0.618 retracement may bring it back to ~$134 before the next leg up.
🧠 Pro Tip:
Combine Fibonacci with:
- RSI (check if oversold at 0.618).
- Candlestick confirmation (e.g., bullish engulfing).
- Volume spike or whale activity.
❌ Common Mistakes:
- Using Fib on low-volume or sideways markets.
- Ignoring the trend direction.
- Relying only on Fibonacci without confirmation.
💬 Final Thoughts:
Fibonacci retracement isn’t magic – but when used with logic and confirmation, it becomes a powerful weapon in your trading toolkit.
🟢 Start applying it today, and you’ll notice how often the market respects those magical lines.
