Is the 50% retracement a Fibonacci ratio?

No. It is a common midpoint convention included in many retracement tools.

How do I calculate a 61.8% pullback?

For an upward swing, subtract 0.618 times the swing's price range from the swing high. The same chosen anchors must be used consistently.

Does touching 61.8% mean the stock will reverse?

No. Price can pause, reverse or continue through the level. A drawing does not determine future order flow.

Glossary

What Is Fibonacci Retracement in Trading?

Fibonacci retracement marks possible pullback levels between a chosen swing low and swing high. Common levels include 23.6%, 38.2% and 61.8%; 50% is also widely plotted but is not a Fibonacci ratio. The levels are reference prices, not evidence that support or resistance will hold.

A worked price example

Suppose an upward swing runs from ₹1,000 to ₹1,200. Its range is ₹200. Measured down from the high:

Pullback	Reference price
23.6%	₹1,152.80
38.2%	₹1,123.60
50%	₹1,100.00
61.8%	₹1,076.40

These are mathematical levels, not executable price recommendations. Actual instruments may require different tick rounding.

Anchors matter more than a precise-looking percentage

Decide how you identify a swing before evaluating the result. A swing high recognized only after several later candles could not have been known at the earlier decision time.

For a downward swing, define retracements upward from the low. Keep the direction and labeling convention explicit because chart tools can reverse their displayed order.

Retracement versus extension

A retracement describes movement back into a prior swing. An extension projects beyond that swing. Neither concept establishes the probability of reaching a level.

Use levels as a way to organize support and resistance research. Selecting whichever pair of anchors best explains yesterday's reversal is hindsight, closely related to overfitting.

Limitations

Swing selection is subjective.
Changing anchors after seeing the outcome introduces hindsight bias.

Frequently asked questions

Is the 50% retracement a Fibonacci ratio?: No. It is a common midpoint convention included in many retracement tools.
How do I calculate a 61.8% pullback?: For an upward swing, subtract 0.618 times the swing's price range from the swing high. The same chosen anchors must be used consistently.
Does touching 61.8% mean the stock will reverse?: No. Price can pause, reverse or continue through the level. A drawing does not determine future order flow.

Last updated: 5 November 2026