Fibonacci has been around for years and has been proven effective in all manner of trading. With the recent surge in Forex trading, sophisticated traders are looking for better tools to give them an edge.
So where do they look?
The 1, 2, 3's Of Nature
To a very famous Italian mathematician who developed a mathematical sequence that bears his name, the Fibonacci sequence. The Fibonacci sequence is a harmonic series of numbers that are derived from the two numbers preceding it. So starting with the number 1 you would have 1 and the number that preceded it 0, which summed equals 1. Following that you would have the sum of that addition which is 1 and the number preceding it 1 which equals two. This would continue on and on: 1,1,2,3,5,8,13 and so on.
Of course in the Forex markets there are no such numbers, so the sequence would be built off of the price numbers that relate to this. The Fibonacci sequence would then be: .236, .50, .382, .618 and so on.
The beauty of these numbers is that they have a certain harmony with nature. It was discovered that Fibonacci sequence relates to the natural order like the pattern of reproduction for rabbits, or rather the pattern of the quantity of offspring. The sequence has a pattern that shows up in the most profound of man's creations as well, such as the dimensions and design in the great pyramid of Geza
Nature And Forex
All of that is nice, but the real deal is how they can benefit Forex trading. Using Fibonacci proportions a trader can follow the patterns of oscillations in the Forex market. This has been used by such greats as Larry Williams who uses Fibonacci numbers as a method for predicting timing and price fluctuations. They are great tool for locating support and resistance levels as well.
If Fibonacci numbers can be figured into your trading it is possible for a pair of currencies to be calculated and used as an entry point into a trade. With a little study and practice the basic tenants of the numbers can be understood and implemented. However even the best traders use them only as secondary information. Primary decisions must be made off of more substantial criterion and then use the Fibonacci numbers to add credence to the trade decision.
Finally, even the great trade - derived from Fibonacci Forex numbers - can be ruined by emotions. Consider using a trading robot who not only knows profitable trade signals, but also trades 24/7 without any emotion. Find out more - and enter to win a 1 on 1 free consultation with a millionaire trader... Click Here > http://ForexTradingRobot.info
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