Fibonacci Retracement

Explanation

Fibonacci retracements are based on the mathematical Fibonacci sequence where each number is the sum of the two preceding numbers. The key ratios (23.6%, 38.2%, 61.8%) represent the mathematical relationships between numbers in the sequence. Traders draw Fibonacci retracements between a significant low and high (or vice versa) to identify where pullbacks might find support. The 61.8% level (the 'golden ratio') is considered the most significant. While lacking theoretical justification, Fibonacci levels work partly because enough traders watch them, creating self-fulfilling prophecy effects.

How Stoquity Uses This

Stoquity incorporates fibonacci retracement analysis across its portfolio management platform, providing real-time monitoring and AI-powered insights for every portfolio.