How to Trade Retracement on Upward Stocks Trend

How Do I Draw Stock Fibonacci Retracement for Stocks Uptrend?

The Fibonacci retracement indicator is placed on a stocks chart in an upward stocks trending market and this Stock Fibonacci Retracement indicator then calculates the retracement levels for the upward trend on the stock charts. Fibonacci retracement levels indicator is used by many traders as a stocks retracement trading technical indicator.

In the Stocks Retracement Strategy example illustrated and explained below the stocks price is moving up between chart point 1 & chart point 2 then after chart point 2 it retraces down to 50.0% retracement level then stocks price continues moving up in the original upwards trend. Note that this stocks Fibonacci retracement indicator is drawn from point 1 to point 2 in direction of the trend (Upwards Direction).

Because we know this is just a retracement based on our stocks chart stocks trend - using this Fibonacci retracement indicator, we put a buy order just between the levels 38.2% and 50.0% retracement levels and our stop loss just below 61.8% retracement level. If you had put a buy at this point in the trade example illustrated and explained below you would have made a lot of pips after the price retracement reached the Fibonacci 50.0% level and then continued moving in the original upwards trend.

How to Trade Stocks Price Retracement on Upward Stocks Trend - Stock Fibonacci Retracement Levels Trading

Explanation for the Above Stock Fibonacci Retracement Strategy Example

Once the stocks price hit the 50.0% Fibonacci retracement level, this retracement level provided a lot of support for the stocks price, & afterward the stocks market then resumed the original upwards trend and continued to move upwards.

23.6% Fibo retracement level provides minimum support & isn't an ideal place to set a stocks trading order.

38.2% Fibonacci retracement level provides some support but stocks price in this example continued to retrace up to the 50% zone.

50.00% Fibonacci retracement level provides a lot of support and in this example, this was the ideal place to place a buy stocks trading order.

For this Stocks Retracement Strategy example, the stocks price retracement reached the 50.0% Fibonacci retracement level, but most of the time the stocks market will retrace up to 38.2% Fibonacci retracement level and therefore most of the time stocks traders set their buy limit orders at the 38.2% Fibo retracement level, while at the same time placing a stop just below 61.8% Fibo retracement level.