Trading glossaryReviewed 16 July 2026
Definition
A Fibonacci retracement divides a selected price swing into conventional proportional levels used as candidate areas for observing a pullback.
In market context
Common plotted percentages include 23.6, 38.2, 50, 61.8, and 78.6, although 50 percent is a market convention rather than a Fibonacci ratio. Every level changes when the analyst changes the swing anchors, timeframe, or treatment of wicks and closes. The grid identifies locations, not automatic reversals, so independent price evidence and predefined invalidation remain necessary in practice.
Source
Use the primary source for fuller regulatory or market context.