50% Fibonacci retracement in forex trading is a very remarkable Fibonacci level, it is very valuable in technical analysis and price forecasting of traders.
Based on my trading experience, 50% fibonacci retracement is very reliable when it comes to the following 2 cases:
1. In a trend, this is the limit when the price corrects, which means that the price will correct to the 50% of the wave, then it is more likely that the price will move in the direction of the trend. In this case, if the 50% level coincides with the resistance/support level then the reliability will increase a lot.
For example, the image below shows, in an uptrend, the price drops and corrects to the 50% fibonacci retracement level, and that level coincides with the support level (the old high of the uptrend), then this is a price range that can be considered to buy, and wait for the price to continue to increase according to the existing trend.
2. In a trend reversal position, right at the first wave of the reversal, the price breaks the resistance/support and confirms the reversal, at 50% fibonacci retracement of the first wave. (after trend reversal). And of course, if that 50% level coincides with the nearest resistance level (the nearest low) then the reliability also increases a lot.
For example, in the image below, after the trend reversed from up to down, the price broke the nearest support level (the last old low), then the price corrected back up to the 50% fibonacci retracement (of the 50% fibonacci retracement first bearish wave), this 50% level coincides with the nearest resistance. Then it is more likely that the price will fall back to start a downtrend. That means we can find an opportunity to sell in this area.
Please see more about the article "Ichimoku Kinko Hyo in Forex trading" (https://www.caphile.com/2022/11/ichimoku-kinko-hyo-in-forex-trading.html), in this article. mentioned the Flat Kijun sign - is the 50% fibonacci retracement level, very easy to recognize, and has many effects in price analysis and forecasting.
The above are sharing based on my experience about 50% fibonacci retracement, hope the article gives you new perspectives and helps you achieve better trading results. Thank you for reading and sharing this article.
Best regards,
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