The Fibonacci Retracement Strategy

Without getting too much into the history of the Fib Retracement, I wanted to show you my basic methodology using Fibs.

Most trading platforms use something that looks like this Fib retracement.

• They may include a 23.6%

• Then 38.2%

• 61.8%

• 78.6%

• And then the full retracement at 100%

So, this is measuring price in an uptrend. In this example, we are looking at price going from 100% to 0% and then monitoring how far back it retraces. Sometimes to the 38.2%, sometimes to the 61.8%. This is fine, it can help you enter a trade, but doesn’t tell you much about exits.

So I change extension to be on the right so I can be more forward looking. I also add the 50% which is not a Fib level, but it is a psychological halfway back that many traders use.

Then, I added in additional fib levels (image below).