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Fibonacci retracement is a technical indicator , which tells the traders that if the market has resistance at a particular price then support shall be offered at the following levels : 24% , 38%,50%,62%,100%.
similarly , if support is given at a particular Price , then Resistance is give at the above percentages
In fibonacci retracement a horizontal line of 38% is used as support and 62% as resistence.
<span style=”color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>We use the the Fibonacci ratios to identify the support and resistance zones.</span>
Fibonacci retracement use horizontal lines to indicate areas of resistance and support- first the high and lows are found out then they are divided among themselves in %age, starting with 100, 61.8, 50, 38.2 and finally at 0. After a significant price movement up or down, the new support lines(or resistance lines) are often near these lines.
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