If you’re in a downtrend and looking to find a retracement to short on, the fib should be placed from the swing high to the swing low. Then you would wait to see how far the price rises to determine whether you have a retracement or reversal. Most fib retracements will be in the 38.2-61.8% zone and if price (generally the real body of the candle and not just the wick) goes into the 70%+ zone, it may indicate a change in the trend or at least weakening of the trend.
Looks like with this one you are assuming that the bottom is where you have placed the bottom of the fib but remember that if you truly are in a downtrend, the next low should be lower than the low in point 1. I would wait to make sure that a lower low is achieved and wait for a retracement to bounce back up and short there. If the lower low is not achieved, the current trend may be weakening, ending altogether, or you may have a reversal. One last thing, sometimes you get really long wicks and it’s unclear what price to use for the swing high/low. I usually use a point about halfway in between the real body and the end of the wick to “average” it out as in point 2. Hope this helps.