What the levels mean

In Oyticker, as on most platforms, level 0 is at the end of the swing and 1 at its start: a level reads “how much of the move has been given back”. The price at level k is end − (end − start) × k. A 38.2% retracement of an advance from 100 to 120 is at 112.36; the 61.8% retracement at 107.64.

Ratio	Where it comes from
0.236	1/φ³ ≈ 0.236
0.382	1/φ² = 1 − 0.618
0.5	Not a Fibonacci ratio: the “half-back” of Dow theory, kept because it is widely watched
0.618	1/φ, the golden ratio's inverse (φ = (1 + √5)/2 ≈ 1.618)
0.786	√0.618 ≈ 0.786
1.272	√1.618 ≈ 1.272
1.618 · 2.618 · 4.236	φ, φ² and φ³

There is no physical reason for markets to respect these ratios. They matter because enough participants watch and trade them, and because they divide a swing into shallow (23.6–38.2%), normal (50–61.8%) and deep (78.6%) pullbacks, which is useful in itself.

How to draw it in Oyticker

Choose Fibonacci → Fib retracement.
Click the start of the swing (the low of an advance, or the high of a decline), then its end. Press and drag works too.
Keep the magnet on so both points sit exactly on the swing's extreme wicks.
Tick Extend right so the levels continue under the pullback that follows the swing; tick 1.618–4.236 to add extension levels beyond the start.

How to read it

Fibonacci retracement of an advance with the pullback stopping exactly on the 61.8% level before a new high — The retracement is drawn from the swing low to the swing high and extended to the right. The pullback ends exactly on 61.8% without reaching 78.6%, and the advance resumes to a new high.

23.6–38.2%: shallow. Typical of strong trends; buyers do not wait for a deep discount.
50–61.8%: normal. The zone where most pullbacks in an established trend end. Many traders treat 61.8% as the last “healthy” level.
78.6%: deep. The trend's structure is at risk; a close beyond it often means the swing's start (100%) will be tested.
A level is confirmed by price behavior on it (a rejection wick, a reversal candle, a higher low on a shorter timeframe), not by the line alone.

Case study: confluence with a former resistance

A Fibonacci level is far more significant when it coincides with another, independent reason for buyers to be there: a former resistance turned support, a moving average, a volume node, a round number. Professionals look for these confluences rather than for any single ratio.

A former resistance level and the 50% retracement of the following advance fall at the same price; the pullback stops there — 108 capped the price twice before the breakout. The 50% retracement of the advance that followed falls at the same price: the pullback stops exactly there and the advance resumes to a new high.

Case study: when the retracement fails

A pullback goes through every level, closes below 78.6% and then breaks the start of the swing — The bounce from 38.2% fails, the decline goes through 50% and 61.8%, and a close below 78.6% leads to a break of the swing's starting low: the advance has been entirely given back.

Define what invalidates the idea before using a level: for a long position on a 61.8% pullback, a close below 78.6% (or below the swing's start) means the scenario is wrong. Without that rule, a retracement tool turns every level into a reason to hold a losing trade.

Limits

With six levels close to each other, price is almost always “near a Fibonacci level”. Only reactions at the level, ideally with confluence, carry information.
Results depend entirely on the chosen swing: wicks or closes, which high, which low.
The ratios are a convention, not a law of markets; statistical studies of their predictive power are mixed.

Charts in this guide use simulated prices generated for illustration; levels and outcomes shown are examples, not observations of a real market. Educational content only, not investment advice.