Question: Do you consider that Fibonacci retracements and extensions are the best tool to operate? Why? What is the correct way to trade with the Fibonacci tool?

Question: Do you consider that Fibonacci retracements and extensions are the best tool to operate? Why? What is the correct way to trade with the Fibonacci tool?

Answer

Never base your decisions on a single tool. Success is achieved with an analysis methodology and that includes many tools. When several point in one direction then that is when you are most likely to hit.

Roughly speaking, when a trend line is broken, I look for the market to at least correct between 38 and 50%. If it corrects more than 61.8%, I think it implies that the movement is likely to extend to the point of origin of the previous trend.