Fibonacci retracement fib numbers for forex are used as support and resistance levels. Fibonacci extension levels are used as profit taking levels. So, what we will learn today is how to apply Fibonacci tool and how to interpret results that we see on the screen.
Fibonacci tool available within their trading platforms. So, click on Fibonacci tool from trading platform that you use. A — our lowest swing, B — our highest swing. So, we will look to BUY some lots at the good lowest price and go up with the trend. Click on A and drag your cursor to B, click. You must see different lines appeared on your chart.
Those lines are called Fibonacci Retracement and Extension Levels. To calculate Fibonacci levels yourself, refer to How to calculate Fibonacci levels. B to some point C, and then continue up in the direction of the trend. Fibonacci retracement levels where we expect the price to take a U-turn and go up again. There we will place our BUY order.