Market Analysis

The Two Points You Chose

A Fibonacci retracement is not a prediction. It is division. You pick two points on a chart, the tool divides the distance between them, and every line it draws is a fixed consequence of that choice — move either anchor by one candle and every level moves with it. That is the whole mechanism, and almost every argument about what the fib is saying is an unnoticed argument about which two points were used. This paper draws the grid on the chart every time, with the leg and both anchors visible, so you can see the levels move as the anchors move. It covers where the ratios come from, why the most-used level is not a Fibonacci number at all, what the retracement depths actually look like when you count them, why confluence is easier to manufacture than to find, and the one narrow job the tool does well: not telling you what will happen, but giving you a location you decided on in advance and can be wrong about in public.

Difficulty

Intermediate

Reading time

46 min

Pages

20