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Mathematical ratios that identify where pullbacks are likely to find support or resistance
Fibonacci retracements are horizontal lines indicating where support and resistance are likely to occur based on the Fibonacci sequence. They're drawn between a significant high and low (a "swing"), dividing the vertical distance by key Fibonacci ratios.
The core idea: after a strong move, price tends to pull back to predictable levels before continuing in the original direction. These levels cluster around the Fibonacci ratios: 23.6%, 38.2%, 50%, 61.8%, and 78.6%.
The 61.8% level (golden ratio) is the most powerful. It appears everywhere in nature - from spiral galaxies to sunflower seeds. In markets, it's the most common bounce point for healthy pullbacks.
Fibonacci works because enough traders watch the same levels. It's a self-fulfilling prophecy — and that's perfectly fine. In trading, a level that works because everyone watches it is just as valid as one that works for 'fundamental' reasons.
The Academy teaches this concept through structured lessons with real chart examples.
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