Fibonacci Levels

Fibonacci levels are a grid on a swing. The common retracements are 23.6, 38.2, 50, 61.8, and 78.6 percent of the swing. The 50 percent line is not a Fibonacci ratio. Traders use it anyway. Extensions such as 127.2 and 161.8 project beyond the swing. This entry is the price-level use. The tool category covers the individual drawings.

Pick two anchors: the swing low and the swing high, in the direction of the move you are retracing. The tool places the ratios between them. Change the anchors and every level moves. There is no single correct swing. There is the swing you declared.

In an uptrend, traders look for pullbacks into the 38.2 to 61.8 band and want price to turn there, with risk under the swing low or under 78.6. The level is a location. The turn has to happen on the chart. A ratio is not a reason to buy a falling market that has not turned.

Redrawing the anchors until a ratio sits on the current price, then calling it confluence. Also stacking Fib levels from five swings and finding "confluence" everywhere.

Markets do not owe the golden ratio a reaction. Levels cluster where many traders draw the same famous swing, so reactions can be self-fulfilling for a moment and absent the next week. Use them as a map of possible locations, beside structure.