How to Draw Retracements Correctly

Uptrend pullback: anchor 0% at the swing high (end of impulse) and 100% at the swing low (start of impulse). Pullback levels appear below the high as price retraces down. Some platforms reverse this convention — verify which anchor is 0% on yours.

Downtrend pullback: anchor from swing high (start) to swing low (end) for the bearish impulse; retracement levels mark where rally may stall as price bounces up into the move.

Use bodies for anchor when wicks are extreme outliers; use wicks when they represent true liquidity sweeps that the market respects. Consistency matters more than dogma — pick a rule and journal outcomes.

On multi-leg trends, draw Fib on the most recent impulse for entries, and optionally on larger swing for macro context. Competing Fibs on one chart should be limited to two.

After drawing, ask: 'Does this leg make sense?' If the swing is choppy and overlapping, Fib output is noise.