Spotted an uptrend and drew a Fib retracement line from a swing low to a swing high. Waited around a day for the trend to retrace until supposedly heading back to it’s original trend. Entered trade from the bottom, and left around the 61.8 fib line. If someone could kindly please draw some constructive criticism that would be great. Thanks!
Yes swing low to swing high.
You see that for the moment the price is at the 76% retracement which correspond to previous support levels.
You always need to watch the fib ratios with the structure levels. Those are good reversal zones.
However the 76% retracement is a very deep retracement. The price might rally to the swing high a bit but will probably break the current support level.
The 61,8 level is like a magnet, a center of gravity. Once the price has broken this level it is very likely to continue to the 100% level unless there is a strong support level.
However always try to put fibs from on an impulse leg. That means a Swing that has broken the brevious structure. And you break previous structure when you close above or below the structure. In this case the price has not closed above the previous resistance.
And dont enter at the fib ratios alone. Always check their relations with the previous structure (supports resistance) and put buy/sell stops a 1-2 levels above/below your fib ratio.
For instance if you would expect the price to reverse at the 61,8% level you would put a buy stop at the 38% with TP at 0% and stop loss at 61,8%. This is a better risk reward than 1:1 plus if the price does not go your way your order won’t get filled and you won’t lose any money.
Keep practising.