Fibonacci on the CMT Exam
Fibonacci analysis is part of the official Classical Techniques domain for CMT Level II. It also appears on Level III in integrated analysis scenarios.
For the full Level 2 curriculum, see the CMT exam guide.
Key Fibonacci Ratios
These ratios derive from the Fibonacci sequence where each number is the sum of the two preceding numbers:
| Ratio | Source | Significance |
|---|---|---|
| 23.6% | Derived from sequence | Shallow retracement |
| 38.2% | n / (n+2) | Moderate retracement |
| 50.0% | Not Fibonacci, but widely used | Midpoint reference |
| 61.8% | n / (n+1) = Golden Ratio | Most significant level |
| 78.6% | √0.618 | Deep retracement |
| 100% | Full retracement | Complete giveback |
Fibonacci Retracements
Retracements measure how much of a prior move has been retraced:
- Draw from swing low to swing high (uptrend) or high to low (downtrend)
- The 38.2% and 61.8% levels are considered most significant
- Confluence with support/resistance strengthens levels
Fibonacci Extensions
Extensions project price targets beyond the original move:
- 127.2%: Common first target
- 161.8%: Major extension (Golden Ratio)
- 261.8%: Extended targets for strong trends
Harmonic Patterns
Advanced patterns using specific Fibonacci ratios:
- Gartley: XA → 61.8% retracement at B, ends at 78.6% at D
- Butterfly: Extension pattern using 127% at D
- Bat: Uses 88.6% retracement at D
- Crab: Uses 161.8% extension at D
These are primarily tested on Level 2. Combine with indicators for confirmation.
Fibonacci & Elliott Wave
The Fibonacci sequence is deeply intertwined with Elliott Wave Theory. Wave proportions commonly follow Fibonacci ratios — Wave 3 often extends 161.8% of Wave 1.
Test your knowledge with practice questions and return to the main guide.
Fibonacci Retracement Levels — Common Support Zones
Key levels at 23.6%, 38.2%, 50%, 61.8%, and 78.6%