I've been reading Steve Nison's candles lately and just today I've reached chapter 12 which talks about retracement levels. Although I am somewhat familiar with Fibonacci, I can't really understand all the fuss about 68%, 32% or 50% retracements. Is this an empirical obervation made over time regarding price action? Or do prices behave that way only because traders and the public in general ,have made that method so popular that they subconsiously gave value to something that might probably didn't have any relation at all with the stock market? I am aware that fibonacci numbers, ratios etc have been observed almost everywhere in nature but I can't understand how they could actually appear in the stock market aswell and why. The only possible, though vague explanation, i can give is that it has something to do with the time horizon each individual is willing to keep his position or manage his profits/losses. Does The time horizon along with the expected profits/losses of individuals, cumulative produce retracement patterns which fuel further similar patterns? I haven't searched extensively on the subject, though a quick search in google didn't actually give me any answers. Unluckily, my resources don't include any extensive remark on fibo so I am a little lost there. If anyone could provide me with his opinion I would be grateful! Plus some footnotes in order to get me started or any resources explaining in depth Fibonacci and retracement levels would be more than helpfull. Thanks in advance!