Fibonacci retracement is a tool that divides a prior price swing into horizontal levels at set percentages — 23.6%, 38.2%, 50%, 61.8%, and 78.6% — to anticipate where a pullback might stall before the move resumes. The trader anchors the tool from a swing low to a swing high (or vice versa), and the levels mark candidate areas to look for continuation.
The ratios derive from the Fibonacci sequence: 61.8% is the inverse of the golden ratio, 38.2% its square, with 50% included by convention though it is not a true Fibonacci number. The 61.8% level draws the most attention, and the 61.8–78.6% band is often called the “golden pocket.” The honest framing is that these are popular, watched levels — part self-fulfilling, part coincidence — not a law of markets.
Retracements are inherently discretionary: the result depends entirely on which swing high and low the trader anchors to, and different anchors yield different levels, so any one drawing is a hypothesis. Fibonacci tools, including retracements, are available on every Secuora plan, including the free no-card tier with all drawing tools.
A swing runs from $100 to $200 (range $100). The 61.8% retracement = 200 − (100 × 0.618) = 200 − 61.8 = $138.20; the 50% level = 200 − 50 = $150.