Playbooks

What it is

A retracement measures how far a pullback has gone as a fraction of the impulse before it. The common levels are 0.382, 0.5, 0.618 and 0.786; 0.618 to 0.65 is the "golden pocket". Extensions (1.272, 1.618) are used for targets.

What to look for

• A clear impulse: one swing low to swing high (or the reverse) that structure agrees is the last leg. Take the points from get_candles.structure.swings rather than picking by eye.
• Depth: a shallow pullback (to 0.382) means strength; 0.5 to 0.618 is typical; beyond 0.786 the impulse is in doubt.
• Confluence: a level is only worth drawing attention to when it lines up with something else: an order block, a prior swing, a support/resistance zone, a moving average, a fair-value gap.
• Reaction: a rejection wick, a structure shift on the lower timeframe, or falling volume into the level.

How to mark it

1. fibonacci from the start of the impulse to its end (time and price on both points).
2. zone kind range (or the matching order-block / fvg kind) where a level and another factor overlap; label it with both (0.618 + OB).
3. level for the 1.272 and 1.618 extension targets, labelled T1 / T2.
4. marker on the reaction candle.
5. position for a concrete scenario.

Scenario logic (analysis, not advice)

• Entry idea: a pullback into 0.5 to 0.786 that shows a reaction, and overlaps another factor.
• Stop reference: beyond the 0.786 level, or beyond the impulse origin (1.0) for a wider, lower-conviction version.
• Targets: the previous extreme (0), then 1.272 and 1.618. Give the reward-to-risk to the first target.

Invalidation

A close beyond the 0.786 level with momentum means a deeper correction. A close beyond the impulse origin cancels the impulse and the measurement with it.

Pitfalls

Fibonacci lines drawn from swings chosen after the fact fit anything. Say which swing points were used and why, and do not draw the tool over an unclear or overlapping leg.