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Fibonacci retracements and extensions

The 38.2 – 50 – 61.8% levels to find entries in pullbacks, and 127.2 – 161.8% for targets.

Fibonacci in trading

Ratios taken from the Fibonacci sequence (0.618, 0.382…) are used to estimate where a pullback might stop. The 50% level is not a Fibonacci ratio but is always added because so many traders watch it.

Retracements23.6% · 38.2% · 50% · 61.8% · 78.6%
Extensions127.2% · 161.8% · 261.8%
On TradingViewFib Retracement drawing tool (Alt+F)

Drawing it correctly

  1. Only draw on a clear swing with an obvious high and low.
  2. Uptrend: drag from the low to the high. Downtrend: from the high to the low.
  3. Use either candle bodies or wicks, and stay consistent.

How to trade it

  • The 50–61.8% zone is the most common entry area (ICT calls 62–79% the OTE).
  • Only enter when the Fibonacci level lines up with something else: old support, an EMA, a demand zone.
  • Stop below 78.6% or below the swing low; target the previous high, then 127.2–161.8%.
TipThe Fibonacci levels tool in the Toolbox calculates every level once you enter the high and low.
Watch outPrice can slice through every Fibonacci level. A level only matters when price action confirms it.

Try it on a chart

Educational content only, not investment advice. Practise on a demo account before using real money.