--- title: 'What is Fibonacci and How to Use It Correctly' source: 'https://youtube.com/watch?v=nzrdqqo9yOQ' video_id: 'nzrdqqo9yOQ' date: 2026-07-26 duration_sec: 658 --- # What is Fibonacci and How to Use It Correctly > Source: [What is Fibonacci and How to Use It Correctly](https://youtube.com/watch?v=nzrdqqo9yOQ) ## Summary This video explains how to use the Fibonacci retracement indicator as a trend-following tool in trading. The presenter demonstrates how to draw Fibonacci levels on charts to identify potential support/resistance zones during market corrections, with emphasis on the 61.8% level as the strongest. ### Key Points - **Fibonacci as a Trend Indicator** [00:02] — Fibonacci retracement is introduced as a trend indicator used to identify correction levels within a downtrend or uptrend. - **Market Corrections in Trends** [00:43] — In a downtrend, the market makes upward correction legs; Fibonacci helps identify where these corrections may end before the trend resumes. - **Key Fibonacci Levels** [02:17] — Levels mentioned: 23.6%, 38.2%, 50%, and 61.8%. The 61.8% level is the strongest and most respected. - **Drawing Fibonacci in a Downtrend** [03:01] — Place the Fibonacci tool from the last peak to the last trough. Price often respects the levels as resistance. - **Entry Rule for 61.8%** [04:14] — If price touches the 61.8% level for the first time, enter on the next candle in the direction of the trend. - **Entry Rule for Other Levels** [05:20] — For levels like 38.2% or 50%, wait for two or three touches before entering on the next candle. - **Fibonacci in an Uptrend** [06:42] — In an uptrend, draw Fibonacci from the last trough to the last peak. Levels act as support. - **Live Example** [08:19] — Shows a chart where price touches 38.2% multiple times and 61.8% once, suggesting entry opportunities. ### Conclusion The Fibonacci retracement tool, when applied correctly, helps traders identify high-probability entry points during market corrections. The 61.8% level is the most reliable, and waiting for multiple touches increases confidence. ## Transcript Bringing you another video about a really great indicator. You guys ask me a lot to make videos about indicators, and here I am bringing trend indicator, okay, bro? You'll always use this when the market is trending upwards or downwards, okay? I'm going to explain here exactly how this indicator works so you can use it in your trading. And I'm sure this indicator will help you a greatly increase your level of accuracy , okay? So, without further ado, let's get to the video. The indicator I'm talking about is the Fibonacci indicator. I'm going to explain to you here, step by step, how it works. But before I explain that, I need to show me try to move the camera a little more this way, see. There, if you can more this way, see. There, if you can see it, look. Beauty. So, what's going on here , folks? Yeah, this indicator, man, it's a trend indicator, man. So, we'll always buy into the market when it's either in a downtrend, like it is here, a clear downtrend, or in an uptrend, man. And the personal market, it always works like this: it's in a downtrend channel , but within that downtrend channel there will be some corrections, so there will be some upward legs like here, look, the market is going down, but it went down, made a little correction here and then it continued down, look. He made another small correction here, continued going down, made another correction, and continues going down here. Dude, the indicator we're going to use, which is Fibonacci, helps to identify roughly where this correction might be happening. So, we're going to happening. So, we're going to identify where there will be a correction here, and how far it can go, okay, man? So this indicator this correction can go before it starts to continue going identify those areas of the market so we can move in to capitalize on that correction. So, what happens next, guys? Like I told you, the market makes corrections here and there. We will use the Fibonacci sequence in the following way. I'll put it here for you to see. Fibonacci has I'll explain exactly how they work. These are regions that the market ends up respecting quite a bit. So here we have the Fibonacci retracement of 23... Which one would be this one? Here we have, from 38.2. We have the 50 here and we have the 61.8 here, okay, bro? Well, the strongest one here would be the 61.8, man. And these regions here, where you see these lines here, folks, those are regions where the price can be reasonable, man. So, she ends up forming we have to identify the smallest regions. I'm going to show you here how you're going to use this marker here. How are you going to mark this here? Look man? So, how are you guys going to do it, bro? You're going to place this tip here exactly at the last peak that was there. So we're going to put this little tip here on top. And this other on the last bottom we had, which in this case was this bottom here, okay? So we're going to put our fiber from one point to another here so it's showing up like this , okay, man? So you all understand, right? We're going to take a understand, right? We're going to take a point there, from the top to the bottom. Ah, and understand it. So, let's suppose we were in this region, here at the very bottom that was here, man. So, our Fibonacci sequence was drawn here. The market started to go up, up, it didn't respect the 23.6 fiber level here , it ended up breaking through it. Then we had the 38.2 one here, which was also ruptured. We had the 50-meter one that was also breached, but the 61.8-meter one held up quite well. He got close to the market and he reversed everything, man. use this? You'll always pick up the next candle. It doesn't matter if you're asking for 1 minute, 5 minutes, 10, 15 minutes, it doesn't matter. Whenever you use this, here's a 5-minute chart. If the price touches that region, you'll take the next candle. How can I know if the region you're going to use is one that's being properly respected? that the market has already broken through everything, man. I'd buy it here, if it reached 61.8, I'd buy it for the next one here, without thinking twice, man. Now, if I without thinking twice, man. Now, if I wanted to target the 23.6 range, or the 38.2 range, regions. So, I'm going to give you an example here . Let's pull the fiber down a little further here. Here we had a peak, we had a trough in this region here, look. Beauty? It's all marked up here, everything's perfect, man. And here, folks, look, we had a Fibonacci retracement at 50, which was respected here, at 50. And we also had the one at 38, man. So, here, look, the 38-year-old, look, he came close, he showed respect. He got here, he even broke through, but he showed we could have caught a sale, and here too we could have caught a sale, because these were regions where the region here was really able to withstand the 38 here. You can see it here, look. So he had several touches and couldn't break through, man. So when you get two or three can pick that up for the next candle. Beauty? If this happens , man, if it breaks your fibers, you'll only be able to get to the next candle on the first touch if it's on the 61.8 fiber. So this 61.8 oz one arrived here for the first time in this area. You could have picked up a sale for the next we have, okay, man? And the price could have gone down here, man. So, the moral of the story is that FIBA ​​is like a region of resistance here, it's part of the market, man. So, he can respect the one from 23, the one from 32, the one from 50, the one from 61, but the strongest one he has is from 61, okay everyone? He usually respects the one from '61 more, man. So, look, the price reached 61, it plummeted. If you look here, mark here, you'll see that he also respected the one from '61. With all the you'll see that the one that's generally being respected the most is always the one from '61, man. Look here, for you to see, top, bottom, and the one that showed the most respect was the one from '61, man. So, the strongest region we have here, guys, is we have here, guys, is 61.8, man. I'm making the markings here so you can see them on the 5- . It could be 1 minute, 2 minutes, 3, 4, 5, it doesn't matter, it will be the same. Here, folks, I'm marking a downward trend. If you want to mark an upward trend, okay, guys? In a region with an upward trend, you're going to mark it differently, man. What are you going to do here? You guys are going to mark the last bottom and the last top, bro. Okay ? So you're going to mark it from the bottom up , okay? Fibonacci. So you're going to come here to Fibonacci, you're going to place it down here and you're going to draw it all the way up there, understand? So it's going to be reversed here, look. And here, folks, so you can see that once again it's respecting the 61 level. The market came here, look, several times at the 50 level. He showed a lot of respect for the 50 appetizers here. It would have been a win. If we had taken this one for the next one, it would have been a great success. And here he broke through and arrived at the '61. And if would have been a big deal too, I would have respected you, man. So the respected you, man. So the strongest one there is 61.8, okay? Here it's marking an upward trend here, okay everyone? So we marked it from the bottom up, okay? Hey, let me check the chart here, man, to see if there are any entry point using the strategy . Let's see, bro. If you have one here, I'll grab a ticket so you can see it in action. Let's see how that market is doing. Ah, here. Let me take a look here. Let me just make a quick mark here. The time here is set to 1 minute. Let me set it to thing. Ah, let me set it for 5 minutes. There's only a minute and a half left , man. Here, look, we could get an entrance here, look. So you can see, this is how our FIBA ​​is doing. Too bad we missed the opportunity already, man. As soon as I walked in here, look. What I'm explaining to you has already happened. We placed the last peak here, right, up here, which would be this region here, see? Let me mark this for you guys. We marked it here, look, for you guys. We marked it here, look, this region up here. And the last fund he had, which was this one here, look. And here, so you can see how you can see that this happens a lot, man. The price was very much in line with the 38-period Fibonacci retracement. Respect here, respect here, respect here. Here he ended up breaking off relations. He even played here at 61 and then he went above 38 and this one played again here at 61.8. The one with 61.8 is the grab a ticket here, because, look, it played once, it played a second time, we could grab a ticket for the next one , man. With two regions that played twice, you can already get an entry, right, bro? Yeah, and here too, man, it hit this area here, we could have caught a reversal, you know, man? If we had picked up the next candle when it hit here, the price would have ended here, in this region, and it would have been a big win here too, okay, man? And it's the same here too. We could have caught a candle here, an entry point here, right when it touched the next candle, which I also 's a region that's being very respectful. So that's it, guys. I wanted to get a ticket here, but it's not going to work because the price there has already expired and it's Time is running out, we won't be able to catch the next candle. But that was the video. If you liked it, leave a big like and comment what you thought. If you want me to make more videos about telling me which indicator you'd like me to cover. If you want me to provide a trend indicator or a consolidated market indicator, just leave it here and I'll provide it for you. And the cool thing about indicators, guys, is that you don't you just need the market to touch the region of your indicator so you can make your entries, right? So, it make your entrance there, and that's it. So you don't need to understand the indicator works, man. So it's very good to work with indicators. That was the ! Feel free to leave a comment letting me know if you'd like me to introduce another type of indicator. Is it closed? I'll stay here for now. Warm regards, and until stay here for now. Warm regards, and until next time. Thanks, bye, I'm off.