Fibonacci ruler

1. What is Fibonacci?

A sequence where each number is the sum of the two before it: 0, 1, 1, 2, 3, 5, 8, 13, 21… Divide a number by the next one and you approach 0.618, the golden ratio.

2. How do you draw it?

Find the two ends of a clear move: the high and the low. Stretch the ruler between them; the levels sit at 23.6, 38.2, 50, 61.8 and 78.6% of that distance.

3. What it shows, and what it does not

Levels many market participants watch. It is not a forecast and it does not tell you what to do. Choosing the two points is subjective: other points give other levels.