Entry after break above 200 moving average.
Use this method strong trends like the one above. When the trend is weaker, it is more possible that this signal may be a false one.
The black moving average is a 200 SMA. You can see that it had been working as support for a long period of time (the blue rectangle). After that, there was a correction to the 78% retracement line and then a move back below the 200 simple moving average. When the price closed below that line, it was a good place to enter the short position. Why? Something changed. Suddenly, the MA stopped working as support and the price moved below it. That was the sign for traders.
Short position opened after breakdown below 200 SMA.
In another example, a daily chart of oil is presented. It is easy to draw the resistance line. After the close above it, there was a good place to enter.
Long position opened after break above resistance line.
The range trading
It is not always so easy and obvious to trade with the Fibonacci tools. Not every move is a clear A to B, correction to C and then strong move up to point D at the extension. Sometimes, the correction to C may last longer. An attempt to break towards the extension may be a failure.
On the chart below you can see that the correction ended at the 38.2% retracement level, but the price failed to move up to the next high.