Fibonacci Number and Ratio Analysis
need to be recalculated at a new larger retracement range, which cannot occur
until a new higher peak has formed after the upside breakout. See Figure 10.60.10.16.4 Fibonacci three‐Leg retracement Formations
Fibonacci three‐leg retracements are calculated and plotted via the same general
rule. After locating the area of observation, that is, the largest observed price
range, calculate the retracement levels for all other ranges that satisfy the general
rule. Refer to Figures 10.61 and 10.62.Figure 10.60 Fibonacci Downside Retracement Levels Invalidated Once the Retrace-
ment Reference Point Is Exceeded.Figure 10.61 Fibonacci Upside Retracement Levels in a Three‐Leg Formation for
Ranges AF, CF, and EF.