Retracement tools place proportional levels between selected swing endpoints. A 50% retracement is commonly included even though 50% is not a Fibonacci ratio. Chart patterns describe geometric arrangements of swings, and their boundaries can be subjective.
Define how you choose endpoints, when a pattern qualifies, and how it becomes invalid. Do not redraw historical patterns after seeing the outcome. Compare results with a simple baseline, include all qualifying examples, and account for costs. Attractive geometry is not a substitute for evidence.
Worked example
A move from 100 to 120 has a 50% retracement at 110. The arithmetic locates a level; it does not establish that buyers will appear there.
Check your understanding
What information is still missing after calculating a retracement level?
Show explanation
A tested entry rule, invalidation, position size, exit process and evidence that the setup is useful after costs.
Progress is stored on this device.