The various Fibonacci Levels are somewhat like support/resistance lines. They act as targets and, whether breached or honored, they act as signals. If Fibonacci Retracements are drawn for more than one price movement, or for different time scales, levels that are common to two or more different Retracements are believed to have greater significance, regardless of whether they represent the same ratios.
Trendlines are commonly drawn by connecting two (or more) lows or two (or more) highs on a chart. In a rising market, most people will use lows, while in a falling market highs are typically used. Some analysts prefer to use only the highs and lows of bars, while others use opens or closes or other values that ignore extremes and reflect a larger number of trades. Because Trendlines that have several touches are generally considered to be stronger, you may want to draw your Trendlines to maximize the number of touches. See Disclaimer.
To start drawing a Fibonacci Retracement grid, press the
button, or choose Fibonacci Retracements from the menu. Choose the options you prefer (Fibonacci Levels must be enabled). Then draw the Retracement grid by drawing a line connecting a high point and a low point on your chart. You can draw from a high to a low or a low to a high, but you should start from the earlier point (the one to the left of the other).
Note: If you have drawn a Fibonacci Retracement and it is the selected item, the title bar will display the current cursor position as a (time, price) Retracement or Extension of the movement represented by the selected item (where 0, 0 is the end of the move); in other words, for any point on your chart, you can immediately see how much Time and Price will have Retraced or Extended your original move simply by pointing at it. Try it! Draw a Retracement line and then move the cursor around while watching the numbers displayed in the title bar at the top of the window.