Trade Like a Girl 💸

In the last few posts, we learned how to identify the major peaks (Highs) and valleys (Lows) on a chart. But once a stock makes a massive, explosive move upward, it rarely just keeps going in a straight line forever. It eventually slows down and begins to pull back, or retrace.

The Fibonacci Retracement tool is what we use to measure that pullback.

When you pull this tool from the very bottom of a move (the Low) to the very top of the move (the High), it automatically maps out percentages. We ignore almost all of them except for the 0.50 level, which represents exactly 50%.

This halfway point is called Equilibrium.

Think of the market like a rubber band. When an institution stretches the price up to a new high, the market naturally wants to snap back toward balance before deciding where to go next. Equilibrium is that point of perfect balance.

The Premium Half (Above 50%): Anything trading in the top half of the expansion move is considered expensive relative to the recent run.

The Discount Half (Below 50%): Anything trading in the bottom half of the expansion move is considered cheap or on sale.

By simply drawing a line right through the center of a major price move, you instantly gain clarity. It removes the guesswork of wondering whether a price drop is a minor dip or a major discount, it tells you mathematically exactly where the balance of power sits.

The Homework: Find the 50% Mark

Step 1: Locate an Explosion

Open up TradingView and find a recent, clean vertical run on a chart, a clear low point that rocketed up to a clear peak.

Step 2: Pull the Tool

Select the Fibonacci Retracement tool from the left sidebar. Click on the absolute lowest wick of that move, and drag it up to the absolute highest wick.

Step 3: Spot the Center

Look closely at the line labeled 0.5. Note the exact price matching that line.

Step 4: Post Your Coordinates

In the comments, tell us your stock’s balance point: “For [$Ticker], the recent move went from $[Low] to $[High]. The exact Equilibrium line is sitting right at $[Price].”