How the levels are computed
In an upswing from a 2400 low to a 2450 high (range = $50):
| Level | Calculation | Price |
|---|---|---|
| 38.2% retracement | 2450 − 50×0.382 | 2430.90 |
| 50% retracement | 2450 − 50×0.5 | 2425.00 |
| 61.8% retracement ⭐ | 2450 − 50×0.618 | 2419.10 |
| 161.8% extension | 2400 + 50×1.618 | 2480.90 |
The practical idea: after a strong advance, price usually pulls back into one of these zones before the trend resumes — making them areas to seek entries with the trend, not against it.
The real power: confluence
A Fibonacci level alone is a probability; but when the 61.8% retracement coincides with prior support or a pivot from the pivot calculator, the zone's significance multiplies because independent reasons gather orders there.
Timing then comes from a candlestick pattern at the zone (a hammer at 61.8% over support, say) — this triple confluence is among the strongest setups in technical analysis, and it still requires a stop-loss like any other.