Fibonacci Retracement Calculator
Calculate Fibonacci retracement and extension levels from a swing high and low to identify potential support, resistance, and price targets in technical analysis.
How to use this tool
- Enter swing high and swing low in the fields above.
- Results update instantly as you type โ or click Calculate.
- Read your 38.2% retracement and the full breakdown beneath it.
โ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation โ verify with a qualified professional.
Formula
Range = Swing High โ Swing Low
Retracement Level = Swing High โ (Range ร Ratio)
Key ratios: 23.6%, 38.2%, 50.0%, 61.8%, 78.6%
The 61.8% ratio (golden ratio ฯ โ 1 โ 0.618) derives from the Fibonacci sequence.
How it works
Fibonacci retracement levels are horizontal price zones derived from the Fibonacci sequence, marking potential support (in uptrends) or resistance (in downtrends) after a significant price move. Traders draw levels between a notable swing high and low; the 38.2% and 61.8% levels are considered the most significant. The 50% level, while not a true Fibonacci ratio, is widely used because price often reacts at the midpoint of a move.
Worked example
Stock Rallying from $60 to $100
- Swing high = $100, swing low = $60; range = $100 โ $60 = $40.
- 23.6% level = $100 โ ($40 ร 0.236) = $100 โ $9.44 = $90.56.
- 38.2% level = $100 โ ($40 ร 0.382) = $100 โ $15.28 = $84.72.
- 61.8% level = $100 โ ($40 ร 0.618) = $100 โ $24.72 = $75.28.
Key retracement levels: $90.56 (23.6%), $84.72 (38.2%), $80.00 (50%), $75.28 (61.8%), $68.56 (78.6%).
Common mistakes to avoid
- Drawing retracements from the wrong direction โ for an uptrend, swing low should be the starting point and swing high the endpoint; reversing them flips the levels and produces incorrect support/resistance.
- Treating Fibonacci levels as exact price targets rather than zones โ price often reverses near these levels but rarely at the precise calculated number, so rigid entry/exit at the exact level misses the intent.
- Confusing retracement levels with extension levels โ retracements (23.6%, 38.2%, 61.8%) identify potential reversal points within a move; extensions (127.2%, 161.8%) project targets beyond the original swing.
Key terms
- Why is 61.8% the golden ratio?
- As the Fibonacci sequence progresses, each number divided by the previous one approaches 1.618 (ฯ). Subtracting 1 gives 0.618, the basis of the 61.8% retracement level.
- What is the most important Fibonacci level?
- The 61.8% (golden ratio) retracement is widely considered the most significant, often acting as a strong support or resistance zone.
- Is Fibonacci retracement reliable?
- It is a widely used tool but not infallible; levels work best when confirmed by other indicators such as moving averages, volume, or candlestick patterns.
- What is the 50% level?
- The 50% retracement is not a Fibonacci ratio but is included because markets frequently react at the midpoint of a prior move, rooted in Dow Theory.
Frequently asked questions
- Why are 38.2% and 61.8% the most-watched Fibonacci retracement levels?
- 38.2% (100 - 61.8) and 61.8% (the golden ratio) are derived from the Fibonacci sequence and appear frequently in natural and financial patterns. Traders cluster orders at these levels, creating self-fulfilling support and resistance.
- Does Fibonacci retracement work in all markets?
- Fibonacci levels are used across equities, forex, crypto, and commodities, but their predictive value is debated. They work best when combined with other technical signals (volume, trend indicators) rather than in isolation.
- What is the 50% retracement level and is it a Fibonacci number?
- The 50% level is included by convention but is not a true Fibonacci ratio. It is widely observed because it represents the midpoint of a move and aligns with Dow Theory concepts of retracement.