Fibonacci refers to a series of technical analysis tools derived from the Fibonacci number sequence, where each number is the sum of the two preceding ones. In trading, Fibonacci ratios such as 23.6%, 38.2%, 50%, 61.8%, and 78.6% are used to identify potential support, resistance, and price target levels.
Example
“The trader drew Fibonacci retracement levels from the swing low to swing high and noticed price bouncing perfectly off the 61.8% level, confirming it as a strong support zone to enter a long position.”