 Hey guys, this is Hydra from Xtrace and in this video we're gonna go over Fibonacci retracement and how to use them so Yes, I'm using thinkorswim and to use the Fibonacci retracement You would want to go to the drawing tools and then you would see it right over here So the way that I draw Fibonacci retracement or is by looking at like the most recent The most recent like drop right so like the biggest drop in like the most recent time period so let's for example, let's say we were back in 2020 and This is the current chart of the market right to the way I would draw it is used up most recent high and then the most recent low so You would say you might be asking isn't this the most recent high? Yes, but you want to find like the most recent high before the biggest drop So this is the most recent high before the biggest drop the most recent low before the biggest drop in the drop and then so this is basically how you would draw the retracement itself and then if you zoom out So if you zoom out, then you get a retracement here and this level is a very important level The 161.8 percent is usually a very significant resistance level in the future So, you know, let's take a look at how this resist if this resistance level was significant for SPY, right? So over here, it looks like we just break out nothing too significant, right? But over here, you see multiple bounces these two weeks, right? It made a shakeout. It was a shakeout week They took they shook up both and then they Ended up closing above that level two weeks in a row. So that's one Sign that this level is actually a significant level and then here we Projected pretty hard and then bounced off this level again the next week after so that's two signs right there Multiple bounces over here. So that's another sign that this is actually a key level Rejection here it's time to try to break out but then failed then multiple rejections here, right? So this level is definitely a very key level. There's many hints that it's a key level, right? Some signs over here bounces over here rejection Rejection and then multiple rejection to you and then it finally breaks out. So the one this level is definitely very important and Yeah, the way you could have gone that is from drying In 2020 you could have used in the 2020 big drop as a way to drive and if you want to For example, this would now be the biggest drop, right? So this was the most recent high and then this was the low so this is the new Fibonacci retracement and this can be used Couple years down the road when you're trying to find a good significant level. So for example if SPY runs up The next couple wants or even years, right? however long it takes once it makes a big breakout move then this level can definitely be a key level to sell into and Yeah, that's basically how you use Fibonacci retracement now. We'll take a look at a couple more examples We'll start off with the Shopify I'm gonna remove all my drawings and then redraw them just so you guys can see how I draw them, right? So I look for like the most recent high and the most recent low. So this for a shop that would definitely be on the top here It's all the way to the bottom here, right? But these levels are insignificant right now because the yeah, it's way above right shop is apparently a 59.5 and the next third Place to sell and when we get a big uptrend would be 270.15 So that's gonna be a wall from now So there's no point in trying to get levels from this right now, but we could go to like the 2020 Um covered drop. So this would be the most recent high. This would be the most recent love and Yeah, we'll zoom in Right look how these levels match up really nicely, right? So this level is definitely very significant notice multiple resistance points here, right? And then it breaks out and then multiple bounces again here And then this level is pretty significant as well multiple rejections multiple rejections and then And then Fails and then finally breaks out and then pulls back in pretty hard. This 161.8 level here is a very clear rejection and then Yeah, the other levels are also pretty significant, but I usually take into account The 161 point or any of the higher levels these three are usually the most important ones Especially when you're trying to find places to sell into strength. These would be like the top levels to look at Now we'll take a look in another one. Let's do sq May remove it again So again, this would be the most recent high and the most recent low right here But I want to you if I draw it from there. I'm not gonna get any Significant levels because they're gonna be all way above right? So I'm gonna do the same thing again As before and draw it from the 2020 high Most recent high most recent low and notice how well this matches up, right? So 161.8 level was a great area to sell into resistance it consolidated for a couple weeks And then ended up breaking out higher, but that doesn't always happen, right? It could always go into that resistance and then fall 2020 wasn't an anomaly here. So Yeah, you see those all these resistance levels breaking and then two sixty one point eight This is also a very key level notice how it rejects checks again Consolidates and then breaks out and then it pretty much got the top of sq To like to the exact point very very very accurate only off by four dollars, but yeah, it got the major resistance level where sqs all-time highs were at and Yeah, and then the 100% 100% retracement is also a pretty significant level notice how we reject multiple times here Reject here and then bounce off here. Um, yeah Next up we'll take a look at Twilio So I'm not gonna redraw it again this time But I used this high and this low again 2020s Drop and we'll look at how significant Twilio's levels are so 161.8 Level this was definitely a key resistance level notice how it consolidated for four weeks and then it broke out So it would have been a good place to potentially sell into strength They don't always go out like there's right they could touch the one sixty one point eight level and then drop So always a good idea to take some profits and lock some gains and what at the one sixty one point eight level And then the two sixty one point eight again very clear basically got it to the dot Touch that level and then rejected very hard for a couple months and then broke out again. And then yeah, they're also touched that 423.6 level and then topped out And then yeah, so this is a very good example why did not your retracement are so big but the smaller levels are pretty significant in themselves, but I like to take a look at the The levels above above 100% because they are very good areas They're very good hints to tell you where to take profits or where to sell into strength take a look at a couple more Roku again, I just I'm not gonna draw it again, but Actually, I mean draw this one again So I'd say the most recent high was there most recent. Oh, it's there Yeah So for Roku this level wasn't too significant, but this level was definitely very significant Notice how it jacks multiple times here rejects again, and then here it finally breaks out So there's definitely some key resistance level over there over here not too much Evidence of it being a clear level and rejected once but the second time it broke out pretty easily But did reject here again So there is that but this level is not as significant for Roku compared to the other names But again, it's always good to take a look at these levels regardless X double. Let's take a look at Etsy That's it was pretty good on There's definitely very clear level of resistance at that 261.8 level Notice multiple rejections here multiple rejections here and reject it again earlier this year And then the 100% level is also very significant very strong bounce formed over there and Then the 422.6 level also pretty significant it chopped around here for a while But many clear rejections and then tried to break out again and then rejected and then finally broke out again Let's take a look at a couple more Let's do Amazon Amazon's levels are pretty good. So this is the 2019 high and then 2019 low from the cover drop To form the really long base and then broke out. This was a good area to solve into strength There's definitely some resistance over there or is it and then yeah, there's more proof of it being resistant earlier in 2022 and Then 2022 was able to successfully break out and then bounce off that level multiple weeks here So definitely a key resistance level or a key level and then here is another key level notice many retractions here Right it chops around it, but there's definitely a big key level here There's many rejections here Then here became support and it bounced off that level many times and then here became resistance again multiple rejections here again So yeah, for Amazon the levels were pretty good. I think there's actually one more Yeah, so if Amazon ever does break out again 225 would be the level to sell to Yeah, you guys can practice around with a couple charts Just trying try doing the same thing that I was doing and then you'll find that these levels actually tend to match up pretty well So we'll do one last morning or one last one here. That's right 2019 high and 2020 low That's how you draw the retracement and then the key levels 161.8 This one's definitely this one was perfect notice multiple rejection to your volunteer volunteer and then Yeah, and then 261.8 levels also pretty significant multiple reject multiple rejections here and here and then try to break off field and Yeah, overall, it's a very This is a this process is a pretty good way of getting key levels for the future when you're looking to sell into strength But yeah, that's pretty much all I got for you guys for this video. Thank you guys for tuning in