Fibonacci Levels

In trading, Fibonacci levels are commonly used to identify potential price reversal points, where an asset's price may encounter support or resistance. The most commonly used Fibonacci levels are 38.2%, 50%, and 61.8%, which represent common retracement levels for an asset's price. These levels are derived by applying the Fibonacci sequence to the difference between an asset's high and low prices over a specified period.

Traders often use Fibonacci levels in combination with other technical indicators and chart patterns to identify potential entry and exit points for trades. For example, if an asset's price is trending upwards and approaches a Fibonacci level of 61.8%, a trader may look for other technical indicators to confirm a potential price reversal and place a sell order.