Fibonacci Retracement (fibret)
Summary:Fibonacci Retracement – horizontal lines used to indicate potential support and resistance levels in the stock market.Formula:Fibonacci retracement levels are calculated based on the high and low prices of the asset over a given period. The common Fibonacci retracement levels are 23.6%, 38.2%, 50%, 61.8%, and 100%.Key Takeaways:1. Fibonacci retracement levels are percentages of a prior move that the price has retraced.2. Fibonacci numbers were first used by Indian mathematicians centuries before Leonardo Fibonacci.3. Fibonacci retracement levels are static, unlike moving averages, and can be used to anticipate and react to price levels.Counterarguments:1. Fibonacci retracement levels should not be relied on exclusively. It is dangerous to assume that the price will reverse after hitting a specific Fibonacci level.2. Fibonacci retracements should be used in conjunction with other analytical tools to accurately identify market trends.