Fibonacci Retracement Definition

Fibonacci retracement is a technical analysis tool that uses horizontal lines to identify potential support and resistance levels based on the Fibonacci sequence.

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What is Fibonacci Retracement?

Common retracement levels include 23.6%, 38.2%, 50%, 61.8%, and 78.6% of a prior price move.

Traders use these levels to anticipate where a price pullback might pause or reverse before resuming its trend.

Example of Fibonacci Retracement

After a stock rises from $50 to $100, a pullback to around $76 would align with the 50% Fibonacci retracement level.

More F terms

Fair Value

Fair value is an estimate of an asset's true worth based on underlying fundamentals rather than its current market price.

Fill Price

The fill price is the actual price at which an order is executed.

Financial Instrument

A financial instrument is any tradable asset, contract, or document that has monetary value.

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