Fibonacci: My personal guide to playing with the magic numbers of trading

Hello everyone! Today I'm going to talk to you about something that has saved my skin several times: the Fibonacci tool. I was skeptical at first, but after losing quite a bit of money by ignoring those famous levels, I eventually got serious about it.

Fibonacci retracement: the art of predicting reversals

Fibonacci levels are not mystical jargon as some would like to make you believe. These horizontal lines (23,6%, 38.2%, 50%, 61.8%, 100%) simply indicate where the price might bounce back after an impulsive move.

I noticed that the 61.8% level is particularly reliable - almost too good to be true. But be careful, sometimes these levels let you down like a bad friend.

How do I trace my retracements

When I see a beautiful trend forming:

1. I identify whether we are in a bullish or bearish trend ( sometimes I get it all wrong )
2. I open my Fibonacci tool on my platform (I don't use the big American platforms that charge us huge fees)
3. I draw from the low point to the high point in an uptrend, or the opposite in a downtrend.
4. I focus on key areas, not just on lines
5. And above all, I NEVER rely solely on Fibonacci - don't be naive

A concrete example

Imagine a crypto that goes from 100€ to 200€. I draw my retracement and I see my levels at 123.60€ (23.6%), 138.20€ (38.2%), 150€ (50%), and 161.80€ (61.8%).

If the price starts to drop, I'm watching these areas for a possible rebound. I've often seen sharp reversals at 50% or 61.8% - it's almost scary.

Fibonacci extensions: to aim further

These levels (127.2%, 161.8%, 200%, 261.8%) help me determine where the price might go AFTER a retracement. That's where I set my profit targets, and frankly, it works surprisingly well.

To trace them, I take my low swing, go to the high swing, then to the bottom of the retracement. The extensions appear as if by magic.

My personal experience

I always combine Fibonacci with other indicators. Once, I saw an oversold RSI right at a 61.8% level with a bullish divergence... I took a position and the price bounced back like a tennis ball. But I have also experienced painful failures by relying on it blindly.

Don't forget that these tools are not infallible. The crypto market is manipulated, and whales don't care about your small Fibonacci levels. But it's precisely because many traders use them that they ultimately end up working.

Test it for yourself, adjust it according to your style, and don't fall into the trap of believing it's an exact science. It's just one tool among others to try to survive in this jungle.