Fibonacci levels are widely popular in financial trading as they can help determine potential support and resistance areas as well as favorable entry and exit levels.
Enter a high and low value below to calculate the Fibonacci levels using our free calculator.
The Fibonacci sequence has been coined in the 13th century by an Italian mathematician, Leonardo Fibonacci. The sequence starts from 0 and 1 and by adding the previous two integers, the result is the following sequence of numbers: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89 and so on – to infinity.
The Fibonacci sequence is where the golden ratio was discovered. If we divide any number in the sequence by its successor, e.g 21/34, the result is approximately 0.618, which is the inverse of the golden ratio or phi (φ).
The golden ratio and the Fibonacci sequence applies almost everywhere and can be used to describe patterns found in nature, our atoms and even the stars. As such, traders consider the Fibonacci sequence is a viable method of revealing patterns in the financial markets.
Fibonacci retracement levels are used to identify where to enter the market, and even determine where to place a take profit or stop loss order . These levels are based on the Fibonacci sequence and the Fibonacci calculator can reveal these levels between a low and a high value.
Fibonacci extensions are useful because they can reveal potential profit targets or estimate where the price will find major support or resistance.
These extension levels may also act as areas where the market may undergo a reversal. In short, extensions are key areas where the market may fluctuate, or see increased trading activity.
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