The direction of the previous trend is likely to continue. ![]() It shows how much of a prior move the price has retraced. Each level is associated with one of the above ratios or percentages. Retracement:įibonacci retracement levels are horizontal lines that indicate the possible locations of support and resistance levels. N technical analysis, a Fibonacci retracement is created by taking two extreme points (usually a peak and a trough ) on a stock chart and dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8%, and 100%. Fibonacci’s sequence of numbers is not as important as the mathematical relationships, expressed as ratios, between the numbers in the series. ![]() They are based on the key numbers identified by mathematician Leonardo Fibonacci in the 13th century. Fibonacci retracements are popular among technical traders.
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