Fibonacci Retracement

Last modified 15:45, 5 Nov 2012

Fibonacci Retracement

The Fibonacci sequence is a number progression that appears throughout nature, defining everything from the number of daisy petals that exist in each consecutive ring moving out from the bud, to the pattern formed by the bumps on a pineapple.

The sequence also makes an appearance in the movement of stocks, and can often predict a point to which a stock may retrace or move forward while it is moving between the upper and lower bounds of a channel.

You can use the Fibonacci Retracement drawing tool to establish these levels quickly and easily.

By default the tool will draw six horizontal lines at the Fibonacci levels: 0%, 23.6%, 38.2%, 50%, 61.8% and 100%.

Position and Edit Fibonacci Retracements

Fibonacci Retracements are typically applied between two extreme points of a chart.

Measure Downward Retracement

If you want to measure a retracement down, position the pointer at the level that represents the high point in the channel and drag the mouse pointer down to the bottom of the channel.

Measure Upward Retracement

To measure a bounce back up, position the pointer at the lower level and drag up to the higher level. Double-click the retracement to change its properties.

The tool output can be moved or resized using the common handles functionality.

The lines can be locked.

Properties and Format

Double click on the Fibonacci Retracement lines to open their Properties dialog box. Use the variables on the Settings and Appearance tabs to adjust the vertical and horizontal positions, as well as alter the line color and style, this tool uses common tool functionality.

The lines can be extended in either direction.

Levels Settings

Click the Retracement Levels tab to set the value for up to six levels within the sequence - turn off levels you do not need by clicking on the check mark to the level's left - and to reposition the labels.

Click Defaults to save the current settings as default or restore the standard settings. Refer to the Defaults topic in the Shared Utilities section for more information.

Pop-up Menu

The pop-up menu (single right mouse click) for Fibonacci Retracement has the standard links: Properties, Cut, Copy, Delete, Lock and Help. It does not contain any special tools.

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