Tools & IndicatorsFibonacci
Support/ResistanceIntermediate[ MP.IND.FIBONACCI ]
Fibonacci
Fibonacci Retracement & Extension
Fibonacci levels applied to trading derive from the numerical sequence discovered by Leonardo Fibonacci in the 13th century (0, 1, 1, 2, 3, 5, 8, 13, 21...).
Category
Support/Resistance
Difficulty
Intermediate
Markets
All
Timeframe
4H, Daily
Combinations
3 tools
Signals
6 setups
LIVE CHARTFibonacci ACTIVE
[ HOW TO READ THE CHART ]
Green Zone: 38.2% retracement in strong trend → Light pullback: aggressive entry, small stop
Red Zone: 50% retracement → Average pullback: psychological zone, high probability
Main Line: 61.8% retracement + confluence (EMA/OB/VWAP) → Golden Entry: ICT OTE setup
Confluence: Combine Fibonacci with Ichimoku for maximum probability
[ WHAT TO WATCH ON THE CHART ]
Observe how Fibonacci behaves relative to key price points. Note moments when the indicator reaches extreme levels and how price reacts. Look for divergence patterns between the indicator and price movement.[ FORMULA ]
Retracement: 0%, 23.6%, 38.2%, 50%, 61.8%, 78.6%, 100% Extensions: 127.2%, 161.8%, 261.8%, 423.6% Key ratio: 61.8% = 1/φ (Golden Ratio = 1.618...)
What signals does Fibonacci generate?
38.2% retracement in strong trend → Light pullback: aggressive entry, small stop
50% retracement → Average pullback: psychological zone, high probability
61.8% retracement + confluence (EMA/OB/VWAP) → Golden Entry: ICT OTE setup
78.6% retracement → Last defense of the trend: stop below to avoid reversal
127.2% extension → First profit target
161.8% extension (Golden Extension) → Main target
What is Fibonacci and how does it work?
Fibonacci levels applied to trading derive from the numerical sequence discovered by Leonardo Fibonacci in the 13th century (0, 1, 1, 2, 3, 5, 8, 13, 21...). The ratio between each number and the next converges to φ = 1.618 (golden ratio). In trading, retracement levels are drawn between two significant swings to identify zones where price might find support or resistance during a correction. The magical effectiveness of Fibonacci in trading is partly mathematical (markets often move in natural proportions) and partly self-fulfilling (millions of traders watch the same levels). The 61.8% level is the most respected: it's the 'OTE zone' (Optimal Trade Entry) of the ICT model and the point where institutions tend to re-enter trends.
How do you use Fibonacci in trading?
Fibonacci is drawn in two ways:
1) RETRACEMENT (the main technique): After an impulsive move (swing), draw Fibonacci from the low to the high (for uptrend) or from the high to the low (for downtrend). The levels represent where price might find support/resistance during the pullback before resuming the trend.
- 23.6%: Shallow retracement, typical of very strong trends. Only enter if you have a lot of experience recognizing strong trends.
- 38.2%: Light retracement, still very strong trend. Great for aggressive entries with tight stops.
- 50%: Psychological level (not a pure Fibonacci ratio but very respected). Average pullback.
- 61.8% (Golden Ratio): THE main level. Most ICT entries are found here. Represents the 'ideal' retracement between trend strength and correction depth.
- 78.6%: Deep retracement, signals a weakened trend. Many traders use this level as the last chance before admitting the impulse has failed.
2) FIBONACCI EXTENSIONS (for targets):
- 127.2%: First target beyond the starting point
- 161.8% (Golden Extension): The main target in almost all models
- 261.8%: Extended target for strong momentum trends
3) THE KEY: CONFLUENCE: A single Fibonacci level has moderate probability. But when 61.8% coincides with: (a) an important EMA, (b) a historical horizontal support, (c) an ICT order block, (d) VWAP, the probability of the level being respected becomes very high. Always look for at least 2-3 confluences.
4) FIBONACCI TIME ZONES: Less used but interesting — Fibonacci levels applied to time (x-axis instead of y-axis) identify potential temporal turning points.
What are the strengths of Fibonacci?
Works on all markets and all timeframes
Based on universal mathematics (natural proportions)
Extremely powerful in confluence with other tools
Includes projections for targets (extensions)
What are the limitations of Fibonacci?
Subjective: which swing to choose?
Not automatic: requires manual analysis
Alone it has moderate reliability — needs confirmation
Can be over-complicated with too many levels
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