Has this ever happened to you? You see a signal too late and miss the entry.
The 78.6% retracement might possibly give you a second chance to “catch the trade”.
For example, today GBPJPY gave a sell signal at 142.01 with a stop at 142.47 (46 pips risk)
A second chance to “catch the trade” occurred on the 78.6% retracement.
The 78.6% Fib retracement sell price of 142.20 happened to be the high!
With the confirmation of lower highs and touching the “upper envelope band”
Best of all the stop loss remained at 142.47 (so the risk was 27 pips instead of 46pips)