Chapter
3 Definitions,
Structures,
&
Examples
Profiting with Chart Patterns
3-18
nirvanasystems.com
Fibonacci Retracement Structures
Here is the structure of the Fibonacci Retracement. You can see that I have the three
primary retracement levels drawn: 38%, 50%, and 62%. As you hit one, what you are
looking for is a reversal off the level through an Eighths line and that is your
indication to get in. The target will typically be the support or resistance level to the
left of the entry point.
Figure 3-17.
Fibonacci Retracement Structure
Diagram
Chapter 3 Definitions, Structures, & Examples
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Nirvana Systems Inc.
3-19
Profiting with Chart Patterns
38% Retracement: Mosaic
As you see a retracement occur in the market, draw your
Eighths scale across the
retracement and see if you land on one of these lines and turn around off of it. In
Mosaic, you can see that in August we came up to the 38% level, turned around and
dropped through an Eighths line after drawing the scale. That would be the place to
get in and we stayed in the trade all the way down to about $37. That is more than a
14% move in about two months off that trade.
Figure 3-18.
38% Retracement Shown on
the Chart for Mosaic