// TRADING TERMINOLOGY
What is Fibonacci Retracement?
A technical analysis tool used to identify potential support and resistance levels based on the Fibonacci sequence.
In-Depth Explanation
Traders use horizontal lines to indicate areas of support or resistance at the key Fibonacci levels (23.6%, 38.2%, 50%, 61.8%, and 78.6%) before the price continues in the original direction.
Practical Example
"After a big rally, the price retraces exactly to the 61.8% Fibonacci level before bouncing back up."
Related Terms
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