How do we draw Fib circles?

[cruiser13]

I have been experimenting with fib circles lately but do not really know how to draw them- from point a to b. Are they used more in more of a time to price relationship or are they just used or are they only to gauge price movements- such as Fib ext. shown on the chart?

The black line show where I drew my a to b. But there is also a deep retraction in price about 1/3 of the way up on this trend which I could have used as point b.

So I curious if this is the correct way to draw them.

Thank you in advance.