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What is Fibonacci retracement?
Fibonacci retracement is one of the most widely used technical charting tools. This explainer covers what the levels mean and how they are computed — as a concept, not as advice.
1. What is Fibonacci retracement?
Fibonacci retracement is a charting tool that marks horizontal levels between a chosen swing high and swing low on a price chart. The levels — 23.6%, 38.2%, 50%, 61.8% and 78.6% — are points where price has historically tended to pause. They are reference lines drawn on a chart, not instructions to act.
2. How are the Fibonacci levels calculated?
Take the vertical distance between a swing high and a swing low. Each level is that distance multiplied by the ratio (for example 0.618) and subtracted from the high (in an uptrend) or added to the low (in a downtrend). The ratios come from the Fibonacci number sequence. MintX computes these automatically for 3,000+ NSE/BSE stocks.
3. What is the 0.618 'golden ratio' level?
The 61.8% level is derived from the golden ratio of the Fibonacci sequence. Chartists watch it because price often reacts near it, but a level is only a reference zone — it is descriptive, not predictive, and not a recommendation.
4. Does MintX tell me when to buy or sell using Fibonacci?
No. MintX shows Fibonacci levels as drawing tools and chart overlays, and summarizes technical stance in plain wording (Strong / Weak / Neutral). It does not provide investment advice or tell you what to do. MintX is not a SEBI-registered investment adviser.
MintX is a technology and analytics platform, not a SEBI-registered investment adviser or research analyst. This page explains a concept for educational purposes only and is not investment advice. Any example figures use delayed data. Markets carry risk; consult a SEBI-registered adviser before investing.