Lines drawn at set proportions of a price swing
Against the last rise or fall, lines are drawn at 38.2%, 50% and 61.8% of the move. They are used as places where a pullback or a bounce often stops. What gives them force is less the arithmetic than the fact that many people watch the same lines.
After a move from $900 to $1,100, the 61.8% retracement sits near $976.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.