Learning - Fibonacci Retracements

Stocks will often pull back or retrace a percentage of the previous move before reversing. These Fibonacci retracements often occur at 38.2% & 61.8% level.

Do not automatically buy the stock just because it is at a common retracement level. Wait and look for candlestick patterns to develop at the 38.2% area. If you do not see any signs of a reversal, then it may go down to the 50% area. Look for a reversal there. You do not know if or when the stock will reverse at a Fibonacci level. Just mark these areas on a chart and wait for signal to go long or short.



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