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7Grade 7: Price Action Lab
Technical Analysis + Price Action · Fibonacci Retracement

How to draw Fibs: swing low to swing high

Demonstrate the correct way to anchor a Fibonacci retracement on a trending chart.

3 min read+25 XPLesson 51 of 96
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Technical Analysis + Price Action

Fibonacci Retracement

Lesson 51 of 9653%
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Lesson 51 of 96Technical Analysis + Price ActionFibonacci Retracement

Today's tiny win: make one idea click.

Demonstrate the correct way to anchor a Fibonacci retracement on a trending chart.

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Two clicks, done right

Every charting platform has a Fibonacci retracement tool. On TradingView, it's the wavy 'F' in the left toolbar. On MT4 it's under Insert > Fibonacci > Retracement. Hotkey is often Alt+F. The tool itself is dead simple — you click two points and it draws horizontal lines at the five retracement percentages between them.

Wick climbs four steps: find swing low, click the low, drag to swing high, levels fill in, showing the right order for drawing a Fib in an uptrend.1Findswinglow2Click thelow3Drag toswinghigh4Levelsfill in
Wick saysIn an uptrend, click the swing low first, then drag up to the swing high.

The skill isn't using the tool. It's picking the right two points. In an uptrend, you click the swing low first (the bottom of the move) and drag up to the swing high (the top). The tool fills in 23.6%, 38.2%, 50%, 61.8%, and 78.6% between them. Those become your reaction zones for any pullback. In a downtrend, you flip it: click the swing high first, drag down to the swing low. The levels now sit above price and mark zones where a relief rally might stall.

Pick the most recent impulse — the most recent clear, decisive move. If EUR/USD ran from 1.0700 to 1.0900 over three days and is now cooling off, those two extremes are your anchor points. Don't reach back two weeks for a different swing. The market has short memory. The most recent move is what matters.

Wick holds a green card saying anchor to the wicks and a coral card saying anchor to the candle bodies, teaching that body anchors miss the true high and low.Do thisAnchor to thewicks, the realextremesNot thisAnchor to thecandle bodies
Wick saysUse the wicks, because they show where price really traded.

Once your Fib is drawn, it stays in place until the chart prints a new swing extreme that invalidates it. If price breaks above your swing high, that high is no longer the top — redraw from the new high. Same in reverse for downtrends. A Fib anchored to stale extremes will lie to you.

Wick points at a practice chart where price breaks past the old high to a new high, teaching that an old Fib goes stale and must be redrawn from the new extreme.Redraw the FibPractice chartNew highOld high
Wick saysIf price breaks above your swing high, redraw the Fib from the new high.

Recap: uptrend = low to high. Downtrend = high to low. Use the most recent impulse. Anchor to wicks. Redraw when price prints a new extreme.

Knowledge check

Answer before moving on.

0 / 3 answered

1. You're drawing a Fib on EUR/USD in a clear uptrend. Where do you click first?

2. Should you anchor your Fib to candle wicks or candle bodies?

3. Price breaks above your swing high after you've already drawn the Fib. What should you do?

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