Fibonacci on the CMT Exam
Fibonacci analysis is a key component of CMT Level 2 (15% weight under Fibonacci & Cycles). It also appears on Level 3 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%