> The most popular Fibonacci Retracements are 61.8% and 38.2%.
> Retracements can be applied after a decline to forecast the length of a counter trend bounce. These retracements can be combined with other indicators and price patterns to create an overall strategy.
> Retracements are based on the prior move. A bounce is expected to retrace a portion of the prior decline.
> After a decline, once a bounce begins, chartists can identify specific Fibonacci retracement levels for monitoring.
> Common Retracements The Fibonacci Retracements
Four common retracements:
> 61.8% > 50% > 38.2% > 23.6%
The 50% retracement is not based on a Fibonacci number. Instead, this number stems from Dow Theory's assertion that the Averages often retrace half their prior move.
> The 61.8% retracement can be referred to as the golden retracement.
> The 38.2% -to- 50% retracement range would be considered moderate.
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