What are Fibonacci Retracements?
A. Fibonacci Retracements help anticipate support and resistance levels along with price targets. Fibonacci Retracements indicate the possible support and resistance levels from important highs and lows. The distance between the start and end points is divided into Fibonacci Retracements, which suggest possible support and resistance points. The Fibonacci Retracement tool is used to measure the amount the market has retraced compared with the overall market movement. When used together with Elliott waves, Fibonacci Retracements are normally drawn from the beginning of Wave 1 (the Zero point) to the top of Wave 3 to find a target price area for the Wave 4 retracement. You should keep an eye out for the end of a trend or correction at the Fibonacci Levels. Horizontal lines are drawn at the common Fibonacci levels of 38.2%, 50%, and 61.8%. As the price retraces, support and resistance often occur at or near the Fibonacci Retracement levels .
