Fibonacci retracements are a popular tool for identifying potential reversal levels in trending markets. Key levels like 38.2%, 50%, and 61.8% often act as support or resistance. For example, in an uptrend, a pullback to the 61.8% level could present a buying opportunity before the trend resumes. Combine Fibonacci levels with other tools like moving averages or candlestick patterns for greater accuracy. Always confirm the market’s direction before entering a trade based on Fibonacci levels. Used correctly, this tool can give you a strategic edge in timing your entries and exits.