Fibonacci Trading

We will be using Fibonacci ratios a lot in our trading so you better learn it and love it like your mother’s home cooking.To get more news about fibonacci calculator for forex trading, you can visit wikifx.com official website.

Fibonacci is a huge subject and there are many different Fibonacci studies with weird-sounding names but we’re going to stick to two: retracement and extension.No, Leonardo Fibonacci isn’t some famous chef. Actually, he was a famous Italian mathematician, also known as a super-duper uber ultra geek.

He had an “Aha!” moment when he discovered a simple series of numbers that created ratios describing the natural proportions of things in the universe.This series of numbers is derived by starting with 0 followed by 1 and then adding 0 + 1 to get 1, the third number.

Then, adding the second and third numbers (1 + 1) to get 2, the fourth number, and so on.You won’t really need to know how to calculate all of this. Your charting software will do all the work for you.

However, it’s always good to be familiar with the basic theory behind the indicator so you’ll have the knowledge to impress your date.

Fibonacci retracement levels work on the theory that after a big price moves in one direction, the price will retrace or return partway back to a previous price level before resuming in the original direction.Traders use the Fibonacci retracement levels as potential support and resistance areas.

Since so many traders watch these same levels and place buy and sell orders on them to enter trades or place stops, the support and resistance levels tend to become a self-fulfilling prophecy.Again, since so many traders are watching these levels to place buy and sell orders to take profits, this tool tends to work more often than not due to self-fulfilling expectations.

Most charting software includes both Fibonacci retracement levels and extension level tools.

In order to apply Fibonacci levels to your charts, you’ll need to identify Swing High and Swing Low points.