Definition. Levels drawn as a percentage of a previous price move, based on ratios from the Fibonacci sequence, most often 38.2%, 50% and 61.8%.
How it works
Percentage levels are drawn between a chosen low and high of the move. Some traders watch them as possible places for a pullback.
Example
After a strong rally, price pulls back roughly halfway and stops there.
What to watch out for
There's no strong scientific evidence that these ratios are especially effective. Any significance they have may come from the fact that many participants watch them. The result also depends on the subjective choice of points.
You'll find the full explanation with graphics, examples and exercises in the 📖 Order flow encyclopedia space, and its use in the live market in the 🔴 Live Room. Both are available to Club members (in Polish).
