Fibonacci retracement levels are horizontal lines drawn at specific ratios (commonly 23.6%, 38.2%, 50%, 61.8%, and 78.6%) between a recent swing high and low, used to identify price levels where a pullback within a larger trend might find support or resistance. They're a probabilistic guide derived from a mathematical sequence, not a guaranteed reversal signal, and work best combined with other confirmation.
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TRADING GLOSSARY
Fibonacci Retracement
Horizontal levels based on key Fibonacci ratios used to anticipate where a price pullback might pause.