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[Oluti]

When studying technical analysis many traders come across a variety of methods for determining support and resistance. One of the most used methods for finding these pricing levels includes Fibonacci retracements. These retracements can be found using by using the” insert” feature found inside most charting packages. From here, Fibonacci retracement lines can be drawn by measuring the distance between an established swing high and low in a trending market.

Below we can see Fibonacci retracements at work on a XAUUSD (Gold) daily chart. The Fibonacci retracements are measured by finding the distance between the daily high at $1,795.80 and the low at $1,672.50. Traditionally traders look for price to move towards the 23.6%, 38.2%, 50%, 61.8% and 78.6% levels for trading. Currently in our example, price has retraced as much as 61.8% of our initial decline. Traders watching this level for resistance can then move to employ the strategy of their choosing.

It is important to remember that Fibonacci retracements can be used on a variety of charts as well as time frames. Once retracement levels are found, these technical points lend themselves to potentially trade a swing back in the direction of the primary trend. Traders can place entries near the Fibonacci retracements themselves, but more often than not Fibonnacci retracements can be used in conjuncture with other technical indicators.

Below we can again see our XAUUSD (Gold) Daily chart, this time including the MACD indicator. Traders will employ MACD to find out if momentum is returning lower, once price has found resistance near a Fibonacci retracement. Once a signal is confirmed, traders can plan to enter the market using market orders while limiting their risk using a stop above resistance established at the 61.8% retracement value.

Finally Fibonacci retracements can be useful in a breakout scenario. If prices continue to break out to higher highs, this is an implication that prices may be reverting against the direction of the prior move. In the example below, breakout traders can look for price to move through resistance at the 78.6% retracement. At this point entry orders can be set as XAUUSD begins to create new market highs. In this example stops can be set below resistance in the event of a false breakout.

 

[lioralace]

Alright, let’s ditch the textbook talk for a second. You wanna know the real deal on Fibonacci retracements—especially with gold (XAUUSD)? Buckle up, ‘cause this is what separates wannabe wizards from the folks who actually keep the lights on.

Here’s the crux: Fibonacci’s not some mystical voodoo, but it’s wild how often those ratios—23.6%, 38.2%, 50%, 61.8%, and 78.6%—keep popping up in real-world trading. Plot them from a swing high to a low (like $1,795.80 down to $1,672.50, if we’re talking gold), and suddenly your chart isn’t just a tangle of candles—it’s a treasure map. Most charting platforms make it super easy, too. You just click, drag, bam—your levels are right there, daring price action to cross ‘em.

But, and this is key: fib retracements alone? Not enough. Don’t kid yourself. Thinking you’re gonna draw a couple lines and swim in easy money is how you end up giving all your cash to that dude who’s still rocking binary options on Instagram. Fibonacci is best used as back-up, you know? Like a trusty sidekick to your main indicator hero.

In that XAUUSD example, price pulled back to the 61.8% retracement level. Traders call that the “golden ratio,” which, okay, sounds kind of cultish, but for some reason, a lot of the big money acts around there. Sometimes you get reversal action so crispy you’d think the universe planned it. But don’t get FOMO—confirm it. Toss in something like an MACD. If the MACD lights up with a bearish crossover while price stalls at your fib level, that’s your setup. Now you’ve actually got a case, not just blind hope.

People treat Fibonacci like it’s a gold-only thing, but honestly? This works all over—forex, stocks, crypto, wherever the candles roam. You could be day trading meme coins or pension-proofing boring blue chips; the principle stays the same.

Now, about those dramatic breakouts: If price smashes right through the 78.6% fib with some serious oomph, that’s not something you wanna ignore. Could be trend reversal time. Some traders’ll slip buy orders right as the break happens, with stops tucked close because, let’s be real, false breakouts are everywhere. Don’t say I didn’t warn you.

So, long story short, fib retracements? Awesome structure for making sense of chaos, but they’re not a complete “system.” You gotta pair them with momentum indicators, price action, and a healthy dose of trader paranoia. Just staring at the lines isn’t enough. Understand why people care about those levels—psychology is everything here. Find the story behind the move, and you might just outsmart everyone still waiting for a magic bullet.

Anyway, go ahead, slap those fibs on your chart. But don’t get married to ‘em. Analyze, confirm, then maybe—just maybe—pull the trigger. Or, you know, sit tight and watch the fireworks. Your call.