Prices, however, have a tendency to retreat after one of these higher highs, this reversal being known as percent retracement (the percentage value that prices retraced from the high to the low).
Fifty Percent Retracement Definition
A large number of traders, especially day traders utilize fibonacci levels when trading. The most common fibonacci levels are 23.6%, 38.2%, 50%, 61.8% and 100%.
PERCENT RETRACEMENT
Overview
A characteristic of a healthy bull market is that it makes higher-highs and higher-lows. This indicates a continual upward shift in expectations and the supply/demand lines.
50 percent retracement presented lucrative sell entry level during the EUR/NZD downtrend, visible on the hourly charts.
Look for the market to come back to the 50 percent retracement level and to trade below this level, but not to close below the 61.8 percent level. This area between the 50 and 61.
A fifty percent retracement of a prior trend is most common. A minimum retracement is usually one-third of the prior trend. The maximum retracement is usually two-thirds. Fibonacci retracements of 38% and 62% are also worth watching.
Gann used to say that the best retracement was a 50 percent retracement. It is the best place to re-enter an existing trend. If the trend resumes, it will then exceed the previous high, which identifies an immediate minimum profit target.
Live - When this option is checked, a line is drawn at the right edge of the chart showing the actual percent retracement level of the current bar. This value/line updates dynamically as price changes.
The Description . . .
Then it formed a bearish candle after four consecutive up days. And, it was reversing near the 50 percent retracement level. Plus, it had relative weakness compared to the S&P 500. Not only that, but the hourly chart was perfect! ...
Definition
Retracement
A price movement in a security or market that is counter to a previous trend. For example, in rising market, a 25 percent retracement would indicate a price decline equal to 25 percent of the previous advance.
Looking at wave 1 as an example, you will notice that, in most cases, it will retrace 23.6% up to 38.2% of the complete previous correction wave. Fifty percent retracement or more is rare for wave 1.
Extension of an Impulse Pattern ...
 See also: Retracement, Fibonacci, Analysis, Chart, Trading
  
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