Fibonacci Retracement
Fibonacci Retracement is a technical analysis tool used to identify potential support and resistance levels. It is based on the Fibonacci sequence, which is a series of numbers where each number is the sum of the two preceding numbers. The Fibonacci Retracement tool is used to identify potential support and resistance levels by plotting horizontal lines at the Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8%, and 100%. These levels are used to identify potential areas of support and resistance in the price of a security.
History of Fibonacci Retracement
The Fibonacci sequence was first discovered by the Italian mathematician Leonardo Fibonacci in the 13th century. He discovered that the sequence of numbers could be used to describe the growth of a population of rabbits. The Fibonacci sequence has since been used in many different fields, including mathematics, music, art, and finance. The Fibonacci Retracement tool was developed in the late 1970s by financial analyst J. Welles Wilder Jr. as a way to identify potential support and resistance levels in the price of a security.
Comparison Table
| Level | Fibonacci Ratio |
|---|---|
| 23.6% | 0.236 |
| 38.2% | 0.382 |
| 50% | 0.50 |
| 61.8% | 0.618 |
| 100% | 1.00 |
Summary
Fibonacci Retracement is a technical analysis tool used to identify potential support and resistance levels. It is based on the Fibonacci sequence, which is a series of numbers where each number is the sum of the two preceding numbers. The Fibonacci Retracement tool is used to identify potential support and resistance levels by plotting horizontal lines at the Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8%, and 100%. These levels are used to identify potential areas of support and resistance in the price of a security. For more information about Fibonacci Retracement, you can visit Investopedia, TradingView, and other financial websites.
See Also
- Fibonacci Sequence
- Fibonacci Expansion
- Fibonacci Time Zones
- Fibonacci Fan
- Fibonacci Arcs
- Fibonacci Numbers
- Fibonacci Ratios
- Fibonacci Retracements
- Fibonacci Extensions
- Fibonacci Price Projections
