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| Fibs describe proportion within nature through a simple mathematical relationship. They work their numbers magic in both flower pedals and seashell ribs. Major Fib ratios describe predictable interaction between trend and countertrend movement. 38%, 50% and 62% form the primary retracement levels. Apply these percentages through rallies and corrections to estimate the extent of movement contrary to the underlying trend. Fibs also examine how far highs or lows should travel before congestion interrupts price change. Many participants can't figure out where to start or end Fib grids. In fact, the absolute lows or highs may not yield the best results. But try them first to see if the intermediate levels correspond with obvious S/R. Use a different approach when retracements pass through zones that show little interest. Congestion extremes often print a test just before a new trend forces price out of a pattern. Use this second top or bottom in place of the absolute high or low. Intermediate levels will now fit right where they belong in many cases.
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