How To Use Fibonacci Retracement In MetaTrader 4

Fibonacci retracement is a build in toolin Metatrader 4 and very helpful in determining potential areas of support and resistance. When Fibonacci retracement installed properly on the chart will often will show the bounce area in the chart but sometimes also break when the price penetrates support or resistance area in the strong trend then headed to next potential area. There are several levels of Fibonacci retracement is often used by traders as follows:

Fibonacci Retracement

Seen in the picture there are 6 levels in Fibonacci retracement used often in MetaTrader 4 those are 0.0, 23.2, 38.2, 50.0, 61.8, 100.0 of levels. That's the Fibonacci levels are often used and is a reference to determine potential areas of support and resistance.

In using Fibonacci Retracement traders needs to understand well about knowledge in determining the swing high and swing low due to the fibonacci lines are formed based on the swing high and the swing low that have been selected as the highest fibo level and the lowest fibo levels. Traders can attached the Fibonacci retracement tool in the chart with the following way:

1. Find the tool on the Insert menu > Fibonacci > Retracement then select it

2. Always start from left to right

3. Discover The swing high

4. Discover The Swing low

5. Fibonacci retracement has been formed with the support and resistance lines potential

Then there are a few settings in the properties of Fibonacci retracement you need to know, for example, the Common tab as seen like the image below:

Name           : the name of the Fibonacci

Description   : to provide description is from the Fibonacci but not a must

Style            : To change the color, line type and thickness of the lines on a diagonal line                                    connecting the swing high and swing lows

Then there are also fibo levels tab that allow you to do some settings such as:

Add  : to increase the number of levels from levels that already by default appear on the                         chart

Style : change the appearance, color, thickness or type of line

It’s little bit easy to use the Fibonacci retracement. You just need to consider to determine swing high and swing low then the Fibonacci levels will be formed and if you do that incorrectly  the potential support and resistance you made was wrong. So you need more practice in high and low to expert in this case.