Guidebook No. 8 of the Samxon Market Indicator Series. An 11-page PDF guide by Paul Samson (Samxon.ca).

Every trend pauses. The question every trader faces during a pull back is how far it is likely to go. Fibonacci retracements are the most widely used answer, and this guidebook explains where they come from, how to draw them correctly and how to use them.

Inside:

• The Fibonacci sequence and the golden ratio
• How each retracement level is derived
• How Fibonacci came into trading
• How to draw retracements from swing points, and what each level tends to tell you
• Extensions, and five ways traders use the levels
• What happens when retracements fail
• Worked examples: a pull back that holds and a trend that breaks

The central idea: retracement depth tells you where you are in the cycle, and a break of the swing low that anchors the levels means the trend has changed. The golden ratio behind the levels is also the first member of a wider family of metallic ratios.

Instant PDF download. For educational purposes only; not financial advice.