Fibonacci Retracement draws horizontal levels — commonly 38.2%, 50% and 61.8% — across a prior move. Pullbacks often stall and reverse near these ratios, so traders use them to time entries within a trend.
How traders use it
- The 61.8% level is the classic golden-ratio retracement.
- Confluence with support/resistance strengthens a level.
- In Elliott, waves 2 and 4 often retrace to specific ratios.
See it in dtcharts
Label waves and Fibonacci levels on live charts in the dtcharts terminal with the Elliott Wave and Fibonacci tools.