Fibonacci Retracement

A Fibonacci retracement is a common technical analysis pattern based on the golden ratio.  When a stock price moves X dollars in one direction, then turns around and moves Y dollars in the previous direction, we say that there was a retracement of $Y.  Many traders look for retracements where the X/Y is Phi, the golden ratio.  This is called a Fibonacci retracement because the ratio was the same as the ratio between two adjacent Fibonacci numbers.

This type of analysis is not limited to Phi.  Some traders look for a retracement with the square of that ratio.  This is the same as the ratio between one Fibonacci number and the number 2 positions further in the Fibonacci series.  Other common numbers are the square root of that ratio and one half.

Trade-Ideas automates the process of finding Fibonacci retracements.  The Fibonacci algorithms are not that hard.  And there are many software tools, some available for free on the web, which will compute these values for you if you input the highest and lowest recent prices for a stock.  The time-consuming part is finding all the support and resistance levels, entering these values into the Fibonacci calculator, then watching for the price of each stock to hit one of these levels.  The Trade-Ideas alerts server does all of that automatically.

Alert Types

We offer the following alert types which are related to this topic.  Click on the icon for a detailed description of the alert, or click on the example link for additional samples of each type of alert.

Get Our Trade Of The Week FREE!

Maybe you're a Trade Ideas subscriber. Maybe not. But we all like to get a trade idea!

Close this popup

Once a week we'll send a trade setup to your inbox, complete with a chart and how we identified it.

You'll learn how to spot more types of setups, and hopefully find one that helps your own trading.

Finding trades is what Trade Ideas users do multiple times every trading day. It doesn't matter if you trade once an hour, or once in a blue moon.

We'll help you spot and understand trade setups you want to jump on!

  • In your inbox weekly
  • Different types of setups each week
  • Full rationale and explanation of the setup
  • How you can spot the trade setup yourself

Get Our Trade Of The Week FREE!

Maybe you're a Trade Ideas subscriber. Maybe not. But we all like to get a trade idea!

Close this popup

Once a week we'll send a trade setup to your inbox, complete with a chart and how we identified it.

You'll learn how to spot more types of setups, and hopefully find one that helps your own trading.

Finding trades is what Trade Ideas users do multiple times every trading day. It doesn't matter if you trade once an hour, or once in a blue moon.

We'll help you spot and understand trade setups you want to jump on!

  • In your inbox weekly
  • Different types of setups each week
  • Full rationale and explanation of the setup
  • How you can spot the trade setup yourself