Enter your low price and high price below, and press 'Calculate' to generate Fibonacci retracements across key ratios.
The Fibonacci calculator generates four levels (23.8%, 38.2%, 50% and 61.8%) between a low price and a high price. For reasons that remain unclear, these levels appear to play an important in the financial markets just as they do in nature, and have been used by traders to identify support and resistance levels at which a currency or a stock price is likely to change course. It is common practice to set take-profit and stop-loss orders either at or near these levels.
These levels, also known as retracement ratios, are closely related to the Fibonacci sequence, uncovered by the Italian mathematician Leonardo of Pisa in the 13th century. The Fibonacci sequence is an infinite series of numbers created by summing the previous two numbers, as follows:
0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89...
Remarkably, these numbers are also related to one another through what is known as the golden ratio or phi, a number approximately equal to 1.6180339887.... in the sense that every number is approximately equal to the previous number multiplied by the golden ratio.
55 * 1.618 = 88.99
Likewise, dividing one number by its successor in the sequence returns the inverse of the golden ratio, one of the key retracement ratios:
55 / 89 = 0.618 which is equal to 1 / 1.618 = 0.618 or 61.8%
Moving down the sequence by one number yield yet another retracement ratio:
34 / 89 = 0.382 or 38.2%
For reasons that remain unclear, these ratios appear to play an important in the financial markets just as they do in nature, and have been used by traders to identify price points where an asset's price is likely to change course.
Tell your friends about us:
Trading foreign exchange, contracts for differences or spread bets on margin carries a high level of risk and may not be suitable for all investors. You could sustain a loss of some or all of your funds if the markets move against you. For this reason, you should not invest more than you could afford to lose. ForexBrokersAZ.com does not accept deposits, advise on investments, deal in investments (as agent or principal) or arrange deals in investments. Information published on this website and in our external communications is factual and for information purposes only. It does not constitute financial advice under the Financial Services and Markets Act 2000. ForexBrokersAZ.com is owned by Hades Capital Limited, a company registered in England under number 08176698.