What is a Fibonacci Calculator?

Fibonacci retracements are a technical analysis tool used to identify potential levels of support and resistance in financial markets. The Fibonacci sequence is a series of numbers where each number is the sum of the two preceding ones. In trading, Fibonacci retracement levels are derived from this sequence and are commonly used to determine potential areas of price reversal or continuation.

To use Fibonacci retracements, you typically start by identifying a significant price move on a chart. Then, you draw lines at the key Fibonacci levels of 23.6%, 38.2%, 50%, 61.8%, and 78.6% from the start to the end of the price move. These levels are considered potential areas where the price may retrace or reverse.