This article is part of a series of articles we've written on different aspects of technical analysis: GBP/USD trading system, how to use williams %R, and others.
Swing traders would find the Fibonacci retracement patterns very useful when identifying trend reversal on the activity chart. The first thing that you should be aware of is the fact that Fibonacci tools are best suited for trending markets. The idea is simple; it expects traders in an upward trending market to go long on retracement at a Fibonacci support level and in a downward trend when price retraces at a Fibonacci resistance level to go short.