Chapter 2 FIBONACCI LEVELS ESSENTIALS
Fibonacci levels are based on the so-called Fibonacci sequence.
Fibonacci levels can be utilized to identify support and resistance zones on a trading chart.
The Fibonacci retracement tool draws retracement levels between the swing high and swing low.
These levels include 0.236, 0.382, 0.618 and 0.786.
While not a Fibonacci ratio, 0.5 is also an important retracement level, while 0 and 1 serve as anchors of the Fibonacci retracement tool.
The Fibonacci extension tool draws extension levels past the swing high or swing low.
These levels most frequently include 1.236, 1.382, 1.5, 1.618 and 2.618.
