I've recently really taken an interest in the Fibonacci retracement tool...but something's been bugging me, and that is the 61.8% ratio. What is it about this number that makes it the most significant of all the ratios? I've heard it be called the "golden ratio", but don't understand why.
Is there a reason? Or is it just something that has been firmly ingrained into the minds of traders, that the reasons don't matter anymore.
I've been trading the EUR/USD since the start of the down trend in December and watched it pretty much blow through all the other Fib retracement levels and only at 61.8% did it find real support, (which I'm glad we've finally broken through).
I'm just perplexed at this ratio. Don't understand why it's the most important one of the bunch.
Any thoughts?
Is there a reason? Or is it just something that has been firmly ingrained into the minds of traders, that the reasons don't matter anymore.
I've been trading the EUR/USD since the start of the down trend in December and watched it pretty much blow through all the other Fib retracement levels and only at 61.8% did it find real support, (which I'm glad we've finally broken through).
I'm just perplexed at this ratio. Don't understand why it's the most important one of the bunch.
Any thoughts?