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Excuse the typo below, should be ".382" not ".318".
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Jim,
A .618 retracement would be a deep one, and if price
approached it with any speed/momentum, I'd not take
the trade, though it can produce profitable
recoveries.
A .318 retracement is more usual in a healthy uptrend,
you should still avoid a trade after a strong thrust
toward that Fib-node though. Also, unless you aim to pick
the absolute bottom each time, you could wait for
confirmation that price is showing support at the
.318 node before taking a position (particularly with
longer-term trades ie not Intraday).
This is a very brief description, but enough to get
the process going.
-Neal.
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