The Fibonacci series is one such tool which has stood its test of time in Technical Analysis. It is a popular tool based on key numbers and their sequence identified by mathematician Leonardo Fibonacci. Fibonacci Retracement is specifically used for determining the support and resistance levels. It is based on the idea that markets will retrace a predictable portion of a move. After that it will continue to move in it’s original direction. It is very simple to draw. Just draw a trend line between the high and low and then after dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%.
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