Fibonacci Retracement calculator
Calculate Fibonacci retracement levels for technical analysis
📊 Understanding Fibonacci Retracements
Fibonacci retracements are horizontal lines that indicate where support and resistance are likely to occur. They are based on Fibonacci numbers and are used in technical analysis to predict potential reversal levels.
The key Fibonacci ratios are 23.6%, 38.2%, 50%, 61.8%, and 78.6%. These levels are derived from mathematical relationships found in the Fibonacci sequence.
🔍 How Fibonacci Retracements Work
Fibonacci retracements are calculated by:
- Identifying the trend: Determine if it's an uptrend or downtrend
- Finding extreme points: Locate the highest high and lowest low
- Applying ratios: Calculate retracement levels using Fibonacci ratios
- Drawing levels: Plot horizontal lines at each retracement level
❓ Frequently Asked Questions
What are the most important Fibonacci levels?
The 38.2%, 50%, and 61.8% levels are considered the most significant. The 61.8% level is often called the "golden ratio" and is watched closely by traders.
How do I use Fibonacci retracements in trading?
Traders use these levels to identify potential support and resistance areas, entry points for trades, and profit-taking levels. They work best when combined with other technical indicators.
Do Fibonacci retracements work in all markets?
Fibonacci retracements can be applied to any financial market - stocks, forex, commodities, and cryptocurrencies. However, they work best in trending markets with clear swing highs and lows.