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Fibonacci in trading: the guide you need

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If you are a trader and you still do not master Fibonacci, it is time to do so. This tool helps you identify where the price of an asset may bounce or explode.

The basics: The key levels are 23.6%, 38.2%, 50%, 61.8%, and 100%. When the price rises, these levels act as support during a drop. When it falls, they act as resistance during a bounce.

How to apply it:

  1. Identify the trend (goes up or down)
  2. In an uptrend: drags from the minimum to the maximum
  3. In a downward trend: drags from the maximum to the minimum
  4. The tool automatically draws the levels
  5. Confirm with other indicators (MACD, RSI, moving averages)

Real example: A stock rises from $100 to $200. If it falls from $200, look for support at $150 (50%), $138 (38.2%) or $123 (23.6%).

Bonus - Fibonacci Extensions: They go beyond 100% (127.2%, 161.8%, 200%). They help you anticipate how much further the price can rise after a bounce.

The trick: Fibonacci only works when combined with other indicators. It's not magic, it's probability. Practice with historical data before entering with real money.

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