Not better than any other level. After the first hour's move, price resumed the move from the 61.8% retracement 47.9% of the time, between the 55% level (44.2%) and the 70% level (50.6%), which nobody watches. The deeper the pullback, the more often the move resumes, smoothly, with no jump at Fibonacci numbers: the "Fibonacci effect" measured −0.5 ± 1.7 percentage points.
We measured 1,813 first-hour moves of the Micro Nasdaq (2019-2026). The move is the first hour's range (9:30-10:30 am New York time), up if the low came first. From 10:30 we looked for the first touch of each retracement level: the five Fibonacci ones and five control levels in between. From the next 1-minute bar: does price resume the move by 10% of its size before retracing another 10%?
Every level, measured
| Retracement | Type | Reached after 10:30 | Move resumes | Cases |
|---|---|---|---|---|
| 23.6% | Fibonacci | 91% | 31.3% ± 2.2% | 1,644 |
| 30.0% | control | 86% | 34.9% ± 2.4% | 1,552 |
| 38.2% | Fibonacci | 81% | 37.0% ± 2.5% | 1,464 |
| 45.0% | control | 76% | 39.7% ± 2.6% | 1,363 |
| 50.0% | Fibonacci | 72% | 40.1% ± 2.7% | 1,293 |
| 55.0% | control | 69% | 44.2% ± 2.8% | 1,232 |
| 61.8% | Fibonacci | 64% | 47.9% ± 2.9% | 1,149 |
| 70.0% | control | 59% | 50.6% ± 3.0% | 1,053 |
| 78.6% | Fibonacci | 53% | 52.1% ± 3.2% | 944 |
| 85.0% | control | 50% | 52.8% ± 3.3% | 882 |
What the numbers say
- Fibonacci levels sit on the same curve as any other level. If 61.8% were special, its dot would jump above the line. It doesn't.
- Depth matters, not the number. A shallow 23.6% pullback saw the move resume only 31% of the time; at 85%, 53%. Shallow pullbacks tended to keep going.
- Even at the best levels it's about a coin flip, and a coin flip loses money after costs (see risk/reward with random entries).
Why Fibonacci seems to work
- With five lines, one is always close. Between 23.6% and 78.6% there's a Fibonacci level every 12-15%: wherever price turns, a line is nearby.
- Same story as other famous levels: round numbers, VWAP and session highs and lows.
Educational content based on our own experience. Not investment advice. Firm rules change: check them on each firm's website. This article contains no affiliate links.