Cheers and Happy Thanksgiving to all.
Yes indeed dark days.If you choose to place entry at 0.5 level, then 0.382 is your stop loss. It is done this way, because of Risk/Reward ratio risk (ratio 3). Also for Fibonacci traders it is very important for the level of 0.382 not to be broken, because then the is officially broken. It is very important to analyze HH and LH or LH LL before placing the Fibonacci retracements. If you line up support/resistance line close to the fibonacci level, increases the probability the price action will react towards it. I only recommend using this method on upward or downward trends, not side ways (range) market. Also keep in mind in lower time frames this method is less reliable, it is better used on long time frames such as monthly, weekly, perhaps the daily. I showed simple demonstration, but in the real world, it takes more keen eye to place the right low point and low point. I hope my explanation sounded logical and simple to you.