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How to Use Fibonacci to Set Stop Loss

In a previous article, we have discussed the definition of Fibonacci and demonstrated how to draw and use the retracement levels. However, just as important as identifying these retracement levels is determining how and where to set your stop loss.

Before you open a position using one of the Fibonacci retracement levels, it is important that you have a boundary or a limit to your potential loss, in case things get out of hand. Do not enter a long or short position without having an exit plan.

In this article, we will demonstrate two ways of using the Fibonacci retracement tool in setting your stop loss.


What is Fibonacci Retracement?

The Fibonacci Retracement is a forex strategy that pinpoints potential levels at which the price moves back to the direction of the trend after a pullback. It uses the concept of Fibonacci or the sequence of numbers that are coordinated with numbers previous to it,...

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Lexatrade scammers? Company overview

Lexatrade forex broker has been operating on the foreign exchange market for many years, trading takes place without commissions and additional fees. The company's clients receive signals to inform them about the optimal trading opportunities as soon as possible, giving market participants time to make...

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Swing Trading Explained

In its most basic sense, swing trading is a trading strategy in which a trader aims to gain in small amounts in short-term trends and avoid big losses by cutting them quickly. These small gains are amassing over time, which, when summed, can amount to...

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