What is the Fibonacci retracement tool?

The Fibonacci retracement tool plots percentage retracement lines based upon the mathematical relationship within the Fibonacci sequence. These retracement levels provide support and resistance levels that can be used to target price objectives. Fibonacci Retracements are displayed by first drawing a trend line between two extreme points.

Why is Fibonacci retracement more accurate than moving averages?

Market trends are more accurately identified when other analysis tools are used with the Fibonacci approach. Fibonacci retracement levels are static, unlike moving averages. The static nature of the price levels allows for quick and easy identification.

What are alert zones in Fibonacci retracements?

Alert zones in Fibonacci retracements refer to the areas where a potential trend reversal, resistance, or support may occur. They help traders identify specific retracement levels to monitor for potential reversals. How can Fibonacci retracements be combined with other indicators?

What is Fibonacci & how does it work?

In its market applications, Fibonacci measures crowd behavior and the willingness to buy or sell securities at key retracement levels. It also identifies key reversal zones and narrow price bands where trending markets should lose momentum and shift into trading ranges, topping, or bottoming patterns.