Fibonacci Retracement
A technical analysis tool that uses horizontal lines at key Fibonacci ratios (23.6%, 38.2%, 50%, 61.8%) to identify potential support and resistance levels.
Read the full guide: Fibonacci Retracement: How to Draw and Trade Fibonacci Levels
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Explained Simply
Fibonacci retracement levels are derived from the Fibonacci sequence and are used to predict where a stock might find support or resistance during a pullback. After a significant move up or down, traders draw Fibonacci levels from the swing low to swing high (or vice versa). The key levels are 23.6%, 38.2%, 50%, 61.8%, and 78.6%. The 61.8% level (the "golden ratio") is considered the most significant — if a stock pulls back to this level and bounces, it often confirms the original trend is intact. These levels work because enough traders watch them, creating self-fulfilling support and resistance.
How Tradewink Uses Fibonacci Retracement
Tradewink's support and resistance detection system automatically identifies Fibonacci retracement levels for every stock in the watchlist. These levels are integrated into the signal generation pipeline — when a pullback reaches a key Fibonacci level that aligns with other support (moving average, VWAP, volume zone), the AI assigns higher confidence to reversal signals at that price.
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See Fibonacci Retracement in action
Tradewink uses fibonacci retracement as part of its AI trading signal pipeline. Start getting signals that use this concept to find real opportunities.