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<p id="isPasted">To apply the retracement levels, traders need to identify the market trend. Is the security or market in an uptrend, with higher highs and higher lows, or conversely in a downtrend, with lower highs and lower lows?</p><p>Once the trend is identified, traders should choose the swing high and swing low as reference points. Most trading platforms have Fibonacci retracement tools that automatically generate key levels such as 38.2%, 50%, 61.8%, and 78.6%. These levels act as potential support in uptrends and resistance in downtrends, helping traders anticipate price reactions.</p><p>Shallow retracements, such as the 38.2% retracement, suggest strong momentum …</p>
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