Fibonacci Retracement
Fibonacci retracement levels (23.6%, 38.2%, 50%, 61.8%, 78.6%) mark where a pullback within a trend might pause.
Drawn from a swing low to a swing high, the levels divide the move into ratios taken from the Fibonacci sequence. Traders watch the 38.2%, 50% and 61.8% levels as places where a dip may find buyers.
There is no proof the ratios themselves matter; they work to the extent that enough traders watch them, and they often line up with other levels such as support. Read the Fibonacci guide.