How to Identify Potential Entry Points with Fibonacci?

As we know, the stock price does not simply move in one way. Instead, after a period of upward or downward movement, stocks may experience a retracement - a pullback in the price that represents an adjustment rather than a complete reversal of the trend.

By connecting the periodic high and low points of a stock's price movement, key levels of 38.2%, 50%, and 61.8% could often represent potential areas where the stock price may experience support or resistance. When a stock price approaches one of these key levels, it may be an opportunity for investors to enter the market.

However, there’s no guarantee that using Fibonacci retracements will work effectively as part of a trading strategy. They should be used in conjunction with other technical indicators such as moving averages or Bollinger bands, etc.

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