The most common Fibonacci mistake is drawing it between random points. It must be drawn between significant, confirmed swing points for the levels to be meaningful.

Step 1: Identify a Clear, Completed Impulse Move

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Find a strong, directional move with a clear start (swing low) and end (swing high) — or vice versa.

The move should be:

• A significant impulse (not sideways chop)
• A completed move (price has already reversed from the swing point)
• Visible on at least the 1H or 4H chart for intraday/swing trading

Step 2: Draw from Swing Low to Swing High (for uptrend pullbacks)

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In TradingView:

1. Select the Fibonacci Retracement tool
2. Click on the Swing Low (the start of the impulse move)
3. Drag to the Swing High (the end of the impulse move)
4. Release — the levels are drawn automatically

Example — Bitcoin Upswing:
Swing Low:  $58,000 (click here first)
Swing High: $68,000 (drag here, release)

Fibonacci levels auto-placed:
0.236 → $65,640 (10% pullback from $68K)
0.382 → $64,180 (18% pullback)
0.500 → $63,000 (50% pullback)
0.618 → $61,820 (Golden Ratio level)
0.786 → $60,140 (deep pullback zone)

Step 3: Draw from Swing High to Swing Low (for downtrend pullbacks)

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In a downtrend, draw from the Swing High to the Swing Low. The levels then mark potential resistance zones where the pullback upward may stall.

Step 4: Watch for Confluence at the Levels

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The Fibonacci level itself is not the entry. It is the zone to watch. When price arrives at a key Fibonacci level AND you see:

• A candlestick reversal signal (pin bar, engulfing)
• A key support/resistance level aligning
• VWAP or Volume Profile POC nearby

…that is the entry trigger.

In the most powerful trending markets, price barely pulls back to 0.382 before resuming. This is a shallower, quicker entry — higher reward but lower probability than the Golden Zone.

Use only when:

• The trend is exceptionally strong (3+ consecutive higher highs with no significant pullback)
• Volume was very high on the impulse move
• Price reached 0.382 AND showed a clear reversal signal

Risk: If the 0.382 breaks, the next major level is 0.618–0.786. Have a plan.

Fibonacci extensions project how far price may travel beyond the swing high after completing a pullback. They are used to set profit targets.

The Key Extension Levels

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How to Draw Extensions in TradingView

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Use the Fibonacci Retracement tool but enable extension levels (1.272, 1.618, 2.0) in settings. Draw from swing low to swing high (same as retracement). The extension levels project forward beyond the swing high.

The ABC Extension Method

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The most reliable way to project targets:

A = Swing Low (start of impulse)
B = Swing High (end of impulse)
C = Pullback Low (end of retracement — ideally in Golden Zone)

Extension targets measured from A to B, projected from C:

Target 1: C + (B-A) × 1.0    → equal to original move
Target 2: C + (B-A) × 1.272  → 127.2% of original move
Target 3: C + (B-A) × 1.618  → 161.8% of original move

Example — Bitcoin:
A = $68,000 (swing low) | B = $70,000 (swing high) | Move = $2,000
C = $68,764 (pullback low, at 0.618 of the A→B move)

Target 1: $68,764 + ($2,000 × 1.0)   = $70,764
Target 2: $68,764 + ($2,000 × 1.272) = $71,308
Target 3: $68,764 + ($2,000 × 1.618) = $71,999