Technical analysis · Intermediate

Fibonacci Retracements

A 1-minute lesson from the MarketPro academy, one of 26 in technical analysis.

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Short answer

Fibonacci retracement levels are horizontal lines drawn between a recent swing high and swing low to highlight zones where a pullback within a larger trend might pause or reverse. The tool is based on ratios derived from the Fibonacci number sequence, most commonly 23.6%, 38.2%, 50%, 61.8%, and 78.6%.

Fibonacci retracement levels are horizontal lines drawn between a recent swing high and swing low to highlight zones where a pullback within a larger trend might pause or reverse.

The tool is based on ratios derived from the Fibonacci number sequence, most commonly 23.6%, 38.2%, 50%, 61.8%, and 78.6%. After a strong move, traders plot these levels to see where a corrective pullback might find support (in an uptrend) or resistance (in a downtrend).

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Run the numbers while this is fresh

The arithmetic in this category has a free calculator on this site, no sign-up and nothing leaves your browser: Pivot points calculator, Fibonacci calculator.

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