It’s a level where the price has a probable chance to bounce back to. I think this is the basic concept but I’m no expert on it. Use Fibonacci retracement to draw a line from a highest high and lowest low on a certain time frame and then you get a set of potential retracement lines which can act as support or resistance. But do your own research on it and don’t take my word for it because I could be wrong in my understanding.
Leonardo Fibonacci was a mathematician who the sequence of numbers where named after, by adding each number to the last like 0, 1, 1, 2, 3, 5, 8, 13, etc. these numbers can be found everywhere in nature, it’s really amazing and you should check out some information on it as it’s very interesting.
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