Fibonacci Calculator

Frequently asked questions

Where do the ratios come from?

Fibonacci numbers (in order) yield the values 0.618 when you divide each number in the series by the following, 0.382 when you skip one number to do so, and 0.236 when you skip two. 1.618 is the reciprocal of 0.618. The 50% level has no basis on the Fibonacci numbers-it is a mid-point that was created for use by traders who have come to rely upon it. The .786 or 78.6% line, however, is the square root of 0.618. A trader's ability to discern what Fibonacci-related lines are based upon an actual mathematical formula and those that were established through trade convention would be far more valuable than having to treat all of these as if they were mystical.

Do Fibonacci levels actually predict reversals?

There is no mechanism by which a ratio from a medieval number sequence should govern markets, and the honest evidence for predictive power is weak. What is real is that a great many traders draw the same levels from the same obvious swing, so those prices attract orders and can behave like support or resistance for entirely self-fulfilling reasons. Use them as candidate levels to watch, confirmed by something else, not as standalone signals.

How do I pick the swing high and low?

Use a swing that is obvious on the timeframe you trade, the kind a stranger would pick out of the same chart. If you have to hunt for the anchor points that make the levels fit your bias, you have stopped analysing and started rationalising. Ambiguity in choosing the swing is the single biggest weakness of the tool, so prefer the clearest recent impulse move and stay consistent.

What is the difference between retracement and extension?

Retracements sit inside the move and answer "how deep might the pullback go before the trend resumes". Extensions sit beyond the move and answer "if the trend does resume, where might it reach". Retracements are commonly used for entries, extensions for targets, which pairs naturally with a risk-to-reward calculation.

Is this the Fibonacci sequence or nth-term calculator?

The Fibonacci Retracement Tool calculates the retracement prices based upon the Fibonacci Ratios (0.618, .382, etc.) which come from the Fibonacci Sequence. It does not calculate the Fibonacci Number Sequence. Therefore, if you would like to see the actual number sequence rather than the prices of retracements, you will have to use a math calculator; it is not something that can be done with this tool.

Which levels actually matter?

In practice the 61.8% retracement and the 50% midpoint get watched most for pullbacks, with 38.2% for shallow ones and 78.6% for deep ones; for targets it is the 161.8% extension, then 127.2%. The 61.8% and 161.8% pair carries the most weight because 0.618 is the golden ratio, the value the sequence converges to. There is nothing magic in any single level, though: a level matters because enough traders watch it, so the round, obvious ones tend to matter more than the obscure ones.

Do I still need this if my platform draws Fibonacci levels?

Not strictly. Most charting apps and sites (TradingView, Investing.com, your broker) draw the same levels once you set the two anchors. This is handy when you want the exact numbers to note down, a shareable link to a specific swing, or a quick check away from a chart. The arithmetic is identical wherever you compute it; what matters far more is which swing you anchor to.