Fibonacci Retracement

Fibonacci retracements use horizontal lines at key Fibonacci ratios (23.6%, 38.2%, 50%, 61.8%, 78.6%) to identify potential support and resistance levels. These levels are drawn from a significant swing high to swing low (or vice versa). The 61.8% level (golden ratio) is considered particularly significant. Traders use Fibonacci for entries, targets, and stop placement.