How to Draw a Fibonacci Retracement

Fibonacci retracement is used to estimate how deep a pullback might go before the trend continues.

Steps

1. Identify one clear swing: from swing low to swing high for an uptrend.
2. Draw the Fibonacci tool from the start point to the end point of that swing.
3. Watch the 38.2% – 50% – 61.8% levels as the commonly observed pullback area.

Be consistent in how you draw it (e.g. always body-to-body or always wick-to-wick).