Fibonacci Retracement Indicator
The Fibonacci Retracement Indicator is a technical analysis tool used by traders to identify potential support and resistance levels in the market. When a stock or asset is in an uptrend, traders may look for retracement levels (typically at 23.6%, 38.2%, 50%, 61.8%, and 78.6%) to find potential buy opportunities as the price pulls back. Conversely, in a downtrend, these levels can indicate potential sell points as the price approaches resistance. A buy signal may be confirmed if the price bounces off a key Fibonacci level with strong volume, while a sell signal may be confirmed with a reversal pattern occurring near these levels. However, it's important to use the Fibonacci retracement in conjunction with other technical analysis tools and indicators for better accuracy.