Quote:
Originally Posted by Poster
Can you explain in simpler details for us laymen?
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Fibonacci levels are very commonly used for technical analysis.
When the market drops a significant amount, technical analysts will look for signs about how much it might recover.
The most common Fibonacci levels are 38.2%, 50% and 61.8%, and people will look for a rebound of those amounts. It becomes somewhat self-fulfilling.
Also, like all technical analysis, it works when it works. And when it doesn't you are just supposed to ignore that fact until next time. (confirmation bias)