Fibonacci Retracement

Market Terms

We don't know everything about the markets.  We're just devoted to learners.  Taken from those smarter than ourselves, here's how we define Fibonacci Retracement.

Technical trading method based off the Fibonacci numbers in ratio form.  A Fibonacci retracement is created by taking two extreme points on a price chart (generally a peak and a trough) and dividing the vertical distance by the Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8%, and 100%.  After identifying these levels, horizontal lines are drawn to denote possible support and resistance levels.