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Fibonacci retracements is a popular instrument used by technical analysts to determine support and resistance areas. In technical analysis, this tool is created by taking two extreme points (usually a peak and a minimum) on the chart and dividing the vertical distance by the key Fibonacci coefficients equal to 23.6%, 38.2%, 50%, 61.8%, and 100%.
Once these levels are defined, horizontal lines are then drawn and used to determine possible support and resistance levels.
When using the Auto Fibonacci Retracement (AutoFibo Indicator), there is no need to explicitly set two points, as is done when using the Fib Retracement tool.
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