Fibonacci Retracements – The 76.4% level

Fibonacci Retracements are zones of possible change of direction for the price, also known as support or resistance where the price tends to change its trajectory. The Fibonacci levels that are more reliable are the 50%, the 61.8%, and the 76.4%. Out of the three levels mentioned, the 76.4% could be the most reliable one as support or resistance. However, we must keep in mind that in order for the price to get to the 76.4%, it would have to break the 61.8% level first, which is also an important Fibo.

Therefore, we must make a decision before hand on which level are we going to take our entry. Both levels have their pros and cons. If we enter the market at the 61.8%, we must use a stop loss at the other side of the 76.4% just in case the price continues retracing all the way to that level and bounces from it.

If we wait for the price to get to the 76.4%, we could end up missing the entry, because the price could reverse direction from the 61.8% before reaching the 76.4%. None the less, an entry at the 76.4% would allow us to use a tighter stop loss and risk less on our position as if we were to enter at the 61.8%.