Fibonacci Retracement Tool Explained

How Do I Interpret Fibonacci Retracement?

Fibonacci Retracement is an indicator used in indices trading to calculate stock indices price retracement levels in an upward or a downward indices trend. These retracement levels are then used by stock indices traders to place stock indices trades and open trades at a better stock indices price after stock indices price has retraced and resumes moving in the original indices trend direction.

What is the Meaning Fibonacci Retracement Levels?

• 23.6% Fibonacci Retracement
• 38.2% Fibonacci Retracement
• 50.0% Fibonacci Retracement
• 61.8% Fibonacci Retracement

How Do I Interpret Fibonacci Retracement Levels?

38.2% and 50.0% Fibonacci Retracement Levels are the most used and most of the time this is where the stock indices price retracement will reach. With 38.2% Fibonacci Retracement Level being the most popular and most widely used retracement level in indices trading.

61.8% Fibonacci Retracement Level is also commonly used to set stop losses for trades opened using this indices trading retracement strategy.

Fibonacci Retracement Levels tool is drawn in the direction of the indices trend as shown in the two examples below.

Fibonacci Retracement Levels and Definition Fibonacci Retracement

Fibonacci Retracement Levels and Definition Fibonacci Retracement

What is the Meaning Fibonacci Retracement Levels? - Fibonacci Retracement Tool Explained

What is the Meaning Fibonacci Retracement Levels? - Fibonacci Retracement Tool Explained