Fibonacci forex trading is the basis of different thriving forex trading institutions that are exhausted by a great total amount of professional forex traders around the world. Trading institutions founded on that ânumbers sequenceâ are so winning that billions of dollars are attained every year by traders following its rules. Fibonacci Forex Trading
Fibonacci was an Italian mathematician and he is best remembered by his world famous Fibonacci sequence, the definition of this sequence is that itâs formed by a series of numbers where each number is the sum of the two preceding numbers; 1, 1, 2, 3, 5, 8, 13 …But in the case of currency trading what is more important for the forex trader is the Fibonacci ratios derived from this sequence of numbers, i.e. .236, .50, .382, .618, etc.
Forex traders can greatly benefit from this mathematical proportions due to the fact that the oscillations observed in forex charts, where prices are visibly changing in an oscillatory pattern, are known to follow Fibonacci ratios very closely as indicators of resistance and support levels; maybe not to the last cent, but so close as to be really amazing.
Additionaly, one important thing to remember is that Fibonacci analysis is a leading indicator. What this means is that by learning the correct Fibonacci trading tactics and techniques you will know how to determine the most probable turning points in the market before the price gets there. Yes, you can know what the forex market will do in advance! Fibonacci Forex Trading
For example, one of the widely used Fibonacci ratios is the 0.382 ratio. As it can be easily seen on any forex chart, the currency prices are continually changing and they follow an oscillatory pattern with peaks and valleys. The limit of the peak is usually called a resistance level while the valley is usually called a support.
In order to find the 0.382 ratio level what you do is, first; measure the size of the drop or rise over your time of interest. Once you have that value you multiply this by 0.382. Now depending on what you are looking at, a rise or a drop on the price of the particular âcurrency pairâ you are trading, you will add the last value you calculated to the total drop or subtract the value from the total rise. Fibonacci Forex Trading
Once you have the value you can then start planning the strategy you will follow in order to make a high probability profit from this valuable information. For the 0.382 ratio level calculated for a recent rise in the âcurrency pairâ exchange price, your calculated level will be a highly probable support and for the case of a level calculated for a recent drop of the prices your level will be a highly probable resistance. Always want to have financial freedom? Check out Fibonacci Forex Trading Program. It’ll change your Life Forever!