Fibonacci Retracement

What Does Fibonacci Retracement Mean?
A term used in technical analysis that refers to the likelihood that a financial asset's price will retrace a large portion of an original move and find support or resistance at the key Fibonacci levels before it continues in the original direction. These levels are created by drawing a trendline between two extreme points and then dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%.

Fibonacci Retracement

Investopedia explains Fibonacci Retracement
Fibonacci retracement is a very popular tool used by many technical traders to help identify strategic places for transactions to be placed, target prices or stop losses. The notion of retracement is used in many indicators such as Tirone levels, Gartley patterns, Elliott Wave theory and more.

Related Terms

Elliott Wave Theory
Fibonacci Arc
Fibonacci Fan
Fibonacci Numbers/Lines
Fifty Percent Principle
Gartley Pattern
Resistance
Retracement
Support
Tirone Levels
More Related Terms

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