Technical analysts: When calculating or plotting Fibonacci retracements, do you use close or high/low prices?
How do you use fibonacci retracements? I don’t day trade so I plot the fibonacci retracement levels using several weeks or more. I always use closing prices. I realized that an argument could be made for using retracement at congestion areas rather than at high and low prices. What do you use?
Some charting software will use the lows and highs others will use closes. Experiment with both and see which one tends to hold more often. You will get a better feel for them the more you use them. Just keep plotting and try different things, you will begin to figure out which one works the best for a particular stock.
In the case of gold, I use a Fibonacci retracement at the congestion price. The reason I did this is that the retracements fit much better this way. The more Fib charts you do, the better you will get at learning what makes a Fib chart “fit” better.
