Fibonacci
Fibonacci Retracement
Price levels derived from the Fibonacci sequence where corrective waves are likely to find support or resistance. Key retracement levels are 23.6%, 38.2%, 50%, 61.8%, and 78.6%. Wave 2 commonly retraces 50%-61.8% of Wave 1.
EXAMPLE
After a $20 Wave 1 advance, Wave 2 pulls back to the 61.8% retracement level ($12.36) before Wave 3 begins.