Fibonacci retracements are a popular technical analysis tool used to identify potential levels of support or resistance.
To trade indices using this method, traders will typically look for reversals at Fibonacci retracement levels that coincide with other technical indicators, such as candlestick patterns or volume.
Traders can then use the Fibonacci retracement levels to establish entry and exit points for trades or stop losses to manage risk.
It's important to test your trading strategy with technical analysis tools such as Fibonacci retracements on a demo account before trading stock indices with real capital.