Understanding Fibonacci Levels in Trading:

• Fibonacci Retracement levels (23.6%, 38.2%, 50%, 61.8%, 78.6%) are used to identify potential **support** (in an uptrend) or **resistance** (in a downtrend) areas where a price pullback might end before continuing the original trend.
• Fibonacci Extension levels (127.2%, 161.8%, 261.8%) are used to project potential **profit targets** beyond the initial price swing.
• The **50%** level is a psychological midpoint and often acts as a significant support/resistance, even though it's not a direct Fibonacci ratio.
• The **61.8%** (Golden Ratio) is considered a particularly strong level for reversals.
• Always use Fibonacci levels in conjunction with other technical analysis tools and indicators for better confirmation.