Fibonacci retracement is one of the most popular and effective technical indicators for identifying support and resistance levels on the financial markets. Whether you're trading Forex, equities, cryptocurrencies or indices, this mathematical tool will transform the way you analyze price corrections and anticipate rebounds.
The Fibonacci sequence is named after the Italian mathematician Leonardo Fibonacciwho popularized it in the 13th century. This fascinating numerical sequence (0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89...) has a unique property: each number is the sum of the two preceding ones.
The key ratio of 1.618 (the "golden ratio") appears everywhere in nature: seashells, flowers, galaxies... and even in the behavior of financial markets! Traders have discovered that prices often respect these mathematical proportions during corrections.
Conseil Pro : The mathematical nature of Fibonacci explains why these levels work: they reflect universal proportions that our brains intuitively recognize.
The effectiveness of Fibonacci retracement in trading is based on a simple psychological principle: investors tend to buy or sell at the same technical levels. When thousands of traders look at the same Fibonacci levels, it creates a self-fulfilling prophecy.
This technical trading indicator helps you :
- Identify likely correction zones in a trend
- Anticipating rebound or break levels
- Optimize your entry and exit points
- Manage your risk with greater precision
Unlike moving averages, which "trail" behind the price, Fibonacci gives you a forward-looking view of the critical levels to watch. That's why we trading with Fibonacci is rapidly becoming an indispensable addition to your arsenal of analysis tools.
Professional traders focus on 5 main levels:
23.6 % - First correction level low If the price rebounds here, the trend is very strong.
38.2 % - Moderate correction This level is watched by many traders for trend continuation entries.
50 % - The psychological level Although not mathematically linked to Fibonacci, this psychological level is crucial.
61.8 % - The golden level! This is often the last bastion before a trend change. If the price breaks this level, watch out for a reversal.
78.6 % - Deep correction Beyond that, the initial trend is seriously challenged.
Important information: Fibonacci levels are zones, not exact lines. Consider a margin of 5-10 pips around each level.
In an uptrend :
- Fibonacci levels become potential supports
- A rebound to 38.2 % or 61.8 % indicates a probable bullish continuation.
- A break of the 78.6 % level suggests a weakening trend
On a downward trend :
- Fibonacci levels act as resistances
- Rejection on 38.2 % or 61.8 % confirms further decline
- A breach of 78.6 % may herald a bullish turnaround
This trend-based interpretation is fundamental to generating reliable buy and sell signals.
Overview of the Tradingview platform and the Fibonacci tool
Simple 5-step method:
Open your TradingView financial chart and selects the asset to be analyzed
Locate the Fibonacci tool: In the left-hand toolbar → "Measurement tools" → "Fibonacci retracement".
Identifies the movement to be corrected:
Bullish trend: click on low point → slide to high point
Bearish trend: click on the high point → slide to the low point
Adjust levels : TradingView automatically displays 23.6 %, 38.2 %, 50 %, 61.8 % and 78.6 %
Customize display : Modify color and thickness for improved legibility
Conseil Pro : Use contrasting colors: red for resistances, green for supports. This improves your analysis speed on your financial chart.
Example EUR/USD : On a EUR/USD uptrend from 1.0500 to 1.1000, the retracement levels will tell you where the price might bounce during the correction.
Indicator overview Fibonacci on Tradingview
Although powerful, the Fibonacci retracement should never be used alone. The best traders combine it with other techniques. confirmation indicators to filter out false signals.
Additional effective indicators :
- RSI to confirm overbought/oversold zones
- MACD to validate momentum changes
- Moving averages to confirm the general trend
- Volumes to validate level strength
Use Fibonacci as confirmation indicator with other technical analysis tools will multiply the accuracy of your trading signals.
Buying setup in uptrend :
Step 1: Identifies a clear uptrend
Step 2: Trace your Fibonacci retracement on the last leg of the uptrend
Step 3: Wait until the price returns to a key level (38.2 % or 61.8 %)
Step 4: Check that the RSI is oversold (< 30)
Step 5: Enter position when RSI leaves oversold zone
Risk management :
- Stop-loss: 5-10 pips below Fibonacci level
- Take-profit: Fibonacci extension 127.2 % or 161.8 %
- Risk/return ratio: minimum 1:2
This approach to trading with Fibonacci This structured approach respects risk management principles while maximizing the probability of success.
Fibonacci extensions are the perfect tool for determining your price targets once the retracement is complete.
Retracements = Corrections Measure how far the price can correct
Extensions = Projections Anticipate targets for next impulse
Key extension levels :
- 127.2 %: First conservative target
- 161.8 %: Highly monitored intermediate target
- 200 %: Ambitious targets for explosive movements
Classic ABC method :
Point A : Start of initial movement
Point B: End of initial movement (before correction)
Point C: End of retracement
The extensions project from point C to anticipate the end of the new impulse.
Practical example: EUR/USD rises from 1.0500 to 1.1000 (AB), then corrects to 1.0800 (C on 61.8 % retracement). The 161.8 % extension from C gives a target of 1.1125.
Mastering this Fibonacci trend prolongation will enable you to optimize your profit targets with precision.
The forex market is respecting Fibonacci levels particularly well. The major pairs (EUR/USD, GBP/USD, USD/JPY) are showing excellent reactivity to retracements.
Forex specifics :
- Trading sessions influence reaction to levels
- Moderate volatility = more precise levels
- High liquidity = fewer false signals
Bitcoin, Ethereum and the major altcoins often respect Fibonacci levels with surprising precision.
Crypto advantages :
- Broad movements = excellent risk/return ratios
- Active technical community = self-fulfilling levels
- 24-hour markets = more opportunities
Please note: Crypto volatility requires wider stops and enhanced risk management.
Stock market indices (CAC40, DAX, S&P500) and blue-chip stocks show excellent compliance with Fibonacci retracements.
Action highlights :
- Large volumes = solid levels
- Institutional investors = compliance with technical levels
- Fundamental data = additional confirmations
Multi-timeframe confluence
The confluence technique is formidable: trace your tracking on H4, Daily and Weekly simultaneously.
Confluence zones = Ultra-solid levels
Example: 61.8 % retracement on H4 + 38.2 % on Daily = Major support/resistance zone.
This multi-timeframe approach is perfectly suited to different trading stylesfrom scalping to swing trading.
Fibonacci and harmonic patterns
Harmonic patterns (Gartley, Butterfly, Bat) make intensive use of Fibonacci ratios for ultra-precise inputs.
Classic Gartley pattern:
- Point B: 61.8 % retracement of XA
- Point C: 38.2 % or 88.6 % retracement of AB
- Point D: BC extension 127.2 % or 161.8 %
It's time to put your new knowledge into practice!
Your Fibonacci challenge:
Open TradingView and select your favorite asset
Identifies a clear trend on H4 or Daily
Trace your Fibonacci retracement using the method explained below.
Analyzes historical reactions at key levels
Combine with RSI or MACD for a complete analysis
Take a screenshot and share with #FibonacciChallenge
BonusThe best analyses will be published on our page!
It's up to you, trader!
Proven benefits:
- Universality : Works on all markets and timeframes
- Simplicity: Easy to plot and interpret
- Anticipation : Predicts reaction zones before they happen
- Psychology: Reflects the collective behavior of investors
- Versatility : Suitable for all trading styles
Costly mistakes:
Drawing any way: Use real turning points
Rely solely on Fibonacci: Always combine with other confirmation indicators
Ignore the general trend: Levels are more reliable in the direction of the trend
Neglected risk management : The further away the level, the greater the risk
Striving for perfection: Levels are zones, not exact lines
Neglecting multiple timeframes: Checks consistency across multiple time units
Does Fibonacci work on all markets? Yes, but with nuances. Forex and crypto show the best reactivity, while equities are more influenced by fundamentals.
What unit of time for Fibonacci? H4 and Daily offer the best compromise between accuracy and reliability. M15-H1 for day trading, Weekly for swing trading.
How to combine Fibonacci and RSI? Look for RSI divergences on key Fibonacci levels (38.2%, 61.8%). This is often synonymous with a reversal.
Are Fibonacci levels pip-accurate? No, always consider a zone of 5-10 pips around each level to take spread and volatility into account.
Can you only trade with Fibonacci? Not recommended. Always combine with at least one confirmation indicator (RSI, MACD, volumes).
Fibonacci retracement is not just another technical indicator. It's a powerful analysis tool that combines mathematics, psychology and technique to give you a clear view of market movements.
To succeed with Fibonacci :
- Regularly practices on TradingView
- Always combine with other confirmation indicators
- Adheres to strict risk management
- Analyzes several timeframes simultaneously
- Stay patient and disciplined
Trading with Fibonacci works because millions of traders use it. The more you master it, the more you'll understand the psychology of the markets.
Jonathan Bardon
Independent trader since 2012 and Ichimoku indicator specialist, Jonathan accompanies you as a trainer on the financial markets.
Last published article
Receive your free fibonacci trading guide in PDF format in your mailbox.
By entering your e-mail address, you agree to receive by e-mail the PDF Trader with Fibonacci as well as information, news and exclusive offers concerning trading.
You can unsubscribe at any time using the unsubscribe link in each e-mail.
Your personal data will be handled in accordance with our privacy policy and will never be passed on to third parties.
English 
Français 
简体中文