Fibonacci tools

Where the ratios come from

The levels — 0.236, 0.382, 0.5, 0.618, 0.786 — are derived from ratios between numbers in the Fibonacci sequence (1, 1, 2, 3, 5, 8, 13…), except for 0.5, which is simply the halfway point. There is no evidence that markets respect these fractions more than any others; they are popular because they are popular.

Live chart · Binance spot data. Drag to pan.

Drawing a retracement

Pick a clear swing: the low where a rise started and the high where it ended (or the reverse for a fall). Press Alt+F, click the start, then the end. The tool draws the levels between them, labelled with both the ratio and the price.

The hardest part is choosing the swing. Use obvious turning points visible on a higher timeframe too. If you have to hunt for anchors that make the levels line up with something, you are fitting, not measuring.

Reading a retracement

The levels give you a vocabulary for pullbacks. “It retraced to 0.382” is more precise than “it dipped a bit”, and it is comparable across symbols and timeframes. Shallow pullbacks (under 0.382) and deep ones (beyond 0.618) describe very different behaviour.

Extensions

The extension tool (Alt+X) takes three points: the start and end of a swing and the end of the pullback. It projects levels at 0.618, 1, 1.272, 1.618 and 2.618 times the first swing from the pullback point. These are distances, not destinations — useful for asking “how large would a move of the same size be from here?”

Combine, do not rely

A Fibonacci level that coincides with a prior support zone or a moving average is more interesting than one sitting in empty space. On its own, a ratio line is just a ruler mark. The Fibonacci pullback study shows one drawn from objectively chosen anchors.

Velqorena articles explain how tools work using past price data. They are not investment advice and do not suggest any trade.