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The term “Fibonacci”, when used in trading, refers to a tool that measures the size of a price move and subsequently places horizontal support and resistance levels on a price chart.

These support and resistance levels are referred to as "Fibonacci levels" and are used to make trading decisions in the same way as normal horizontal support and resistance levels.

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Fibonacci is a series of numbers where if you divide the first number by the next and you do it infinitely the result will get closer and closer to 0.618; this is the golden ratio. When trading cycles with Fibonacci the 61.8% retracement is one of the strongest levels you can trade.

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