π Capital Market Chronicles – Episode 268: TECHNICAL ANALYSIS – FIBONACCI RETRACEMENT (Part III)
“Lines don’t make money. Decisions do.” π°π
Drawing Fibonacci levels is easy.
Using them correctly? That’s where traders are separated from chart decorators π
Fibonacci retracement truly comes alive only when it’s connected to real trading decisions — entries, exits, and risk control.
π― Buy & Sell Signals
Fibonacci helps traders identify high-probability zones, not guaranteed turning points.
✔ In an uptrend
When price pulls back to a Fibonacci support level and shows signs of strength, it can signal a potential buying opportunity.
✔ In a downtrend
A retracement into Fibonacci resistance may offer a sell or shorting opportunity, especially if momentum weakens.
Remember: Fibonacci doesn’t predict when price will turn — it highlights where it might react.
π Stop-Loss Placement
This is where Fibonacci quietly saves traders from emotional damage π
Smart traders place stop-losses:
• Slightly below Fibonacci support for long positions
• Slightly above Fibonacci resistance for short positions
Why?
Because markets love to test levels — placing stops exactly on them is like standing on a railway track hoping the train slows down π
π Fibonacci doesn’t eliminate risk — it organises and defines it.
π₯ The Golden Ratio – 61.8%
This level isn’t famous by accident.
At 61.8%, markets often:
• Stage sharp reversals
• Pause dramatically before continuing
• Or explode once it decisively holds
That’s why traders across the globe watch this level like hawks π¦
Ignore it at your own peril.
π§ Fibonacci Works Best With Friends
Fibonacci alone is helpful.
Fibonacci with confirmation is powerful.
Combine it with:
• Volume
• RSI
• Moving averages
• Price action
And suddenly, Fibonacci stops being a guessing tool —
and becomes a probability framework ππ§
Next up: extensions, clusters, and advanced Fibonacci wizardry π§♂️π
Where targets get projected and confidence gets sharper.
⚠️ Disclaimer: This Blog is for general guidance only and does not replace personalised financial advice.
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