Fib trading is the shorthand for using Fibonacci ratios to map potential support, resistance, and targets on a price chart.

Fib trading is the shorthand for using Fibonacci ratios to map potential support, resistance, and targets on a price chart. By anchoring a swing high and low, traders project retracement levels (23.6%, 38.2%, 50%, 61.8%, 78.6%) to plan pullback entries, and extension levels (127.2%, 161.8%, 261.8%) to set profit objectives. The method works across markets—stocks, forex, crypto—and timeframes because it reflects crowd behavior clustered around familiar levels. Effective fib trading focuses on confluence: alignment of key ratios with trends, structure, moving averages, and round numbers. A clear trade plan defines invalidation (stop placement beyond the next level), position sizing, and scaling rules to control risk. Many traders wait for confirmation—such as a reversal candle, RSI divergence, or a break-and-retest—at a chosen fib level before committing capital. Backtesting your anchor rules, level preferences, and management steps helps remove emotion and improve consistency. With discipline, Fibonacci tools turn raw swings into structured setups you can repeat.

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