Fibonacci Retracement
Horizontal levels drawn from a prior swing that mark where a pullback might pause before the trend resumes.
Traders anchor the tool to a recent high and low, then it plots lines at 23.6%, 38.2%, 50%, 61.8% and 78.6% of that range. The 61.8% level, the 'golden ratio,' draws the most attention. Price often stalls or reverses near these marks.
Why it works is debated. Some credit real math in market structure; others call it self-fulfilling, since enough traders place orders at the same levels. The 50% line isn't even a Fibonacci number. Treat these as zones to watch, not exact prices.
Related terms
Price levels where buying or selling has repeatedly stalled a move, marking floors and ceilings on a chart.
TrendlineA straight line linking a series of highs or lows to map the direction price is traveling.
BreakoutPrice pushing decisively through a level it had been stuck below or above, often on rising volume.
Moving Average (MA)A line that averages price over a set period, smoothing noise to reveal the underlying trend.