Step by step
How to read it
- 1Pick the swing’s start — the low.
- 2And its end — the high. The tool draws the lines in between.
- 3The pullback reached about 61.8%. The lines measure depth; they do not predict a turn.
Watch out
Common mistake
Drawing it on random swings until a line fits. Use a clear swing that everyone can see.
In one line
Definition
Lines at 23.6%, 38.2%, 50%, 61.8% and 78.6% of a swing, used to measure how far a pullback has gone.
Check yourself
Check yourself
A swing runs from 100 up to 200. Where is the 50% retracement?