Do Fibonacci Retraces Work? by Thomas Bulkowski
Traders often plot Fibonacci levels on their charts and some consider these levels important to trade around. Does this approach work, or is it just wishful thinking?
Does a Fibonacci retrace work in the stock market? In the lab, this article will conclude the answer is no. In the real world, the answer may be yes. It could be like trying to prove that aspirin prevents heart attacks: One study may conclude it does, another may say it does not, and a third is inconclusive with the authors arguing that the first two studies are flawed.
Lets take a closer look at the Fibonacci retrace as it applies to trading the stock market ...