What is Fibonacci retracement in trading?

Fibonacci retracement is a tool used to identify potential support and resistance levels during a pullback. Traders use it to predict where the price may pause or reverse within a trend.

Which Fibonacci levels are the most important?

The most widely watched levels are: 38.2% – shallow pullback, 50% – mid-level retracement, 61.8% – golden ratio, 78.6% – deep retracement. These levels often act as turning points in trending markets.

Do Fibonacci levels work in all markets?

Yes. Traders use Fibonacci on stocks, indices, forex, and commodities. The underlying concept is based on market psychology, not asset type.

What is the difference between Fibonacci retracement and extension?

Retracement identifies pullback levels inside a trend, while Extension identifies potential targets after a breakout or breakdown.

Is the 50% Fibonacci level truly a Fibonacci number?

No. But traders widely use 50% because markets often retrace halfway before resuming the trend. It behaves like an important psychological midpoint.

Fibonacci Retracement Strategy Simplified

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Fibonacci Retracement Strategy Simplified

Trading Strategies

Fibonacci Retracement Strategy Simplified

Fibonacci retracement strategy in a simple and structured way, making the strategy easy for beginners while still offering depth for experienced traders. Also, we will learn to draw a Fibonacci retracement on Dhan