What does Fibonacci Retracement mean?

A Fibonacci retracement marks the levels — 38.2%, 50%, and 61.8% of a prior move — where a stock's price often pulls back before continuing its trend.

After a big move, price often pulls back to 38.2%, 50%, or 61.8% of the move before continuing. These Fibonacci levels are common spots where traders watch for bounces or reversals.