Fib. Retracement levels

[Maverick27]

Hello,

I'm finding it extremely difficult in knowing which level will hold in Fib. Retracements !

I've seen on the charts that prices reverse midway between 50% & 61.8% sometimes. Price can under shoot or over shoot a Fib. level.

Can somebody pls. give me a few tips/helpful advice on this subject matter ?!

Do we look for Trend Reversal patterns @ Fib. Levels or can we incorporate few simple indicators to help determine probable price turning points etc,etc..

Thanks, Mave

[enablerb]

I find the fib retracements are best if used in two ways. First they just give you the first clues that a turn might happen. Retracement in general means that the move is a correction and not a trend. So when there is a correction of a trend a rule of thumb is that a correction usually doesnt break the 61.8 fib level. The other way that retracement level are helpful is that when a level is broken and closes past on a 15 or even better a 1 hour chart it indicates there is a high probability that the retracement will follow through to the next fib. For example if it breaks the 61 and closes past the 61 Fib level, price will probably continue to the 76 fib level.