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Fibonacci retracements are trend lines drawn between two significant points, usually between absolute lows and absolute highs, plotted on a chart. Intersecting horizontal lines are placed at the Fibonacci levels.

Fibonacci retracements are useful tools that help traders identify support and resistance levels. With the information gathered, they can place orders, identify stop-loss levels, and set price targets. Although useful, traders often use other indicators to make more accurate assessments of trends and make better trading decisions.