Fibonacci Retracement

Brief

The section explains how to work with the Add Fibonacci Retracement tool.

Details

During a major trend, prices often retrace for a while and then resume moving in the direction of the major trend again. The Fibonacci Retracement tool can help determining how far the prices might retrace. On a chart, the Fibonacci Retracement tool is drawn as Trend Line with several (three by default) retracement lines running horizontally at certain spacing.
The Fibonacci Retracement tool can be used to define support and resistance levels during the market retracement that can help determining trade entry points. It is often drawn together with the Fibonacci Channel tool. The intersection points of the tools are considered to be exceptionally strong support or resistance levels.