Find Hidden Levels of Support and Resistance with Fibonacci Retracement

Fibonacci Retracement Levels are a very important aspect of trading using Technical Analysis.

If you are a trader that uses Technical Analysis then learning more about Fibonacci Retracement Levels is a skill that will help you be able to identify those “hidden” levels of support and resistance that most other traders will never see.

So what is a Fibonacci Retracement?

These retracements mirror percentages based on the finbonacci sequence. The levels primarily used are 38.2%, 50%, and 61.8%. Now, these levels correspond to both support and resistance levels based on a stocks movements up or down. So, you can use these levels for retracements to find potential hidden levels of support and resistance. Also, a less known aspect of using fibs, is that you can use these same levels to project out potential hidden levels of resistance.

Using these levels is known as Fibonacci Extensions. Check out the Youtube video below for a great understanding of how some traders use Fibonacci Levels to empower their trading.

Here is another video made by Tim Knight who is the founder of “Prophet Charts” which is a very powerful Technical Analysis charting software used by the ThinkorSwim Trading Platform. Check out this video to further your knowledge of how to draw a Fibonacci Retracement on your stock charts.

After watching these videos you should have a much better understanding of how you can use Fibonacci Retracements to identify those hidden areas of support and resistance. By understanding where these levels are, you are better able to determine where to enter a new stock or option position or exit that position.

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