Fibonacci Retracement Levels
A 1-minute lesson from the MarketPro academy, one of 22 in trading indicators.
Fibonacci retracement levels are horizontal lines drawn between a recent swing high and swing low, marking ratios (such as 38.2%, 50%, and 61.8%) that many traders watch as potential areas where a pullback might pause or reverse. After identifying a clear swing move, a Fibonacci tool divides that move into the standard ratio levels.
Fibonacci retracement levels are horizontal lines drawn between a recent swing high and swing low, marking ratios (such as 38.2%, 50%, and 61.8%) that many traders watch as potential areas where a pullback might pause or reverse.
How The Levels Are Drawn
After identifying a clear swing move, a Fibonacci tool divides that move into the standard ratio levels. During a pullback against the larger trend, traders often watch these levels as possible zones of interest, on the idea that pullbacks frequently retrace a proportion of the prior move before continuing in the original direction.
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Step 7 of 10 on Indicators Toolkit
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Not investment advice. Past performance is not indicative of future results.