RE: I Just Don't Get It!
Just think of it as areas to enter if you miss the first push up. It is very hard to predict which ones will be the right levels and it won't always be right. So it depends on which chart you are looking at. For example if you were day trading and there was a gap up, then you would take a Fib between one of the previous day's low to the pre-market high. Then there is a high chance that if there is a pullback and it is indeed going up, that it will retrace 50% or 67%.
The reason why it works is because other people are also eyeing this level so if you draw it incorrectly, then you are screwed. This is why if it loses a certain level, people just cut the trade since it went wrong.
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