# Fibonacci

In the world of trading, Fibonacci Retracement is a powerhouse tool used to identify hidden levels of support and resistance. It’s based on the idea that markets don't move in a straight line; they "breathe"—pulling back before continuing a trend.
1. How the Tool Works
Traders take two extreme points on a chart (a major high and a major low) and divide the vertical distance by the key Fibonacci ratios: 23.6%, 38.2%, 50%, 61.8%, and 78.6%.
The "Golden Pocket": The area between the 61.8% and 65% levels is often considered the most significant zone where a price reversal is likely to happen.
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