FIBONACCI

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A popular technical tool for identifying and measuring retracements and extensions. Fibonacci numbers are the sequence of numbers in which the next figure is the sum of the previous two. They form the basis of percentages of retracement. Lines corresponding to 38.2%, 50%, 61.8% and other retracements are drawn on charts in an attempt to find points of entry and more. Fibonacci is also used to find possible extensions of movements, also called ‘expansions’ and ‘projections’. See also ‘retracement’ and technical analysis.

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