Fibonacci retracement levels
A term used in technical analysis that refers to the likelihood that a financial asset's price will retrace a large portion of an original move and find support or resistance at the key Fibonacci levels before it continues in the original direction. These levels are created by drawing a trendline between two extreme points and then dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%.
The Fibonacci Calculator, when used properly, is one of the most powerful tools in determining the support and resistance of a currency trade. Fibonacci calculator allows the Trader to set bounce and profit targets. The beauty of Fibonacci is best expressed through setting targets. Rather than react at the moment Price changes behavior, setting bounce and profit targets helps the trader to plan ahead, allowing price to come to the trader, instead of the trader chasing price.