The levels
The standard retracement levels are 23.6%, 38.2%, 50%, 61.8% and 78.6% of the prior move. Traders watch them as areas where a pullback may pause. The extensions (127.2%, 161.8%, 261.8%) project beyond the move and are often used as targets.
How to draw them, step by step
- Find a clear, recent swing: a low and a high with a strong move between them.
- Pick the direction. In an uptrend, measure from the swing low to the swing high. In a downtrend, from the swing high to the swing low.
- Calculate or draw the levels. In an uptrend, the level price is high − range × ratio.
- Mark the levels you care about, usually 38.2%, 50% and 61.8%.
Example
Price rises from 100 to 200. The range is 100. The 38.2% retracement is at 161.8, the 50% at 150 and the 61.8% at 138.2. Enter your own swing in the Fibonacci retracement calculator for every level and extension.
How to use them sensibly
- Look for confluence. A level matters more when it lines up with a support or resistance zone or a trend line.
- Wait for confirmation. A reaction candle, a signal from an indicator, or a break of a short-term trend beats entering blindly.
- Place the stop beyond the next level. Then size the trade from the stop with the position size calculator.
- Be consistent about swings. Different swing choices give different levels.
What they cannot do
Fibonacci levels do not predict turns. They are widely watched, which can make them matter, but plenty of pullbacks pass straight through them. Treat them as one input, never a plan on their own.
Try it with your own numbers
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Fibonacci levels are a starting point.
Levels matter more when something else agrees. These indicators show zones, trend phase and momentum.
Keep reading
Last updated October 2026. For education only. Not financial advice.