Intermediate 7 min read
Fibonacci retracements — useful or noise?
Where Fib actually works, where it's confirmation bias, and how our AI uses it.
Fibonacci retracement levels (38.2%, 50%, 61.8%) work not because of any inherent market law, but because enough participants watch them that they become self-fulfilling zones of interest — similar to round numbers. That's a real edge, but it's a crowd-behavior edge, not a mathematical one.
The mistake: drawing Fib from an arbitrary swing and treating every level as sacred. Anchor the retracement from a swing that actually defines the current trend, and treat the levels as zones to watch for a reaction, not exact prices to blindly buy or sell at.