Fibonaccial Trading Techniques
Fibonacci,was an Italian mathematician.He has a number sequence named after him which is known as the Fibonacci numbers.In the Fibonacci sequence of numbers,each number is the sum of the previous two numbers,starting with 0 and 1. Thus the sequence begins 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377,610 etc.That is,after two starting values,each number is the sum of the two preceding numbers.
On going to the higher sequence of the fibonacci numbers, the closer two consecutive numbers which when divided get the answer of the golden ratio. On applying these ratio's to the trading stocks, thus results are produced as primary and secondary. One direction result indicates the primary result and the opposite direction refers to the secondary result.
The retracement levels of the most common Fibonacci numbers in the primary trend are 38.2%,50%,61.8%. The most basic stock charting applications use these standard levels. When once the counter trend rally takes place the retracement levels of Fibonacci behaves as magnets. Excluding these levels there are other levels which provide resistance and those levels are 75%, 78.6%, 87.5%, and 88.7%.
The thumb rule states that the retracement levels makes about 50%, and the earlier mentioned levels attracts the price by behaving like magnets. The price must be analyzed by the persons who are familiar on those levels. Always the prices do not move in constant. Stocks, futures, forex,all instruments which are liquid,will often oscilate in Fibonacci proportions.
Fibonacci ratios may be applied to the Price scale,and also to the time scale of charts.Many traders use Fibonacci ratios with a few simple indicators that can help them to determine probable price turning points,optimum entry,exit and stop-loss levels.
The usage of reversal pattern recognition of price after identifying the primary trend, which coincides with the fibonacci retracement level to prove that the counter trend move has been over. Then the actual lows and double bottom levels are known from the stocks.
In "forex trading",the trader must be aware of the international markets as there can be "risk arbitrage" in the market situations.The trader can use "forex signal trading"for the assistance. In Forex trading,the currency of one nation is traded for that of another.So one needs to be fully aware of the market situations in order to be "forex trading".
For the schooling traders it might be hard for using those applications of Fibonacci towards trading and takes time to make them perfect. Fibonacci retracement levels are being used by many beginning traders, and it is also used by many advanced traders also to become a self-fulfilling of their goals. - 23200
On going to the higher sequence of the fibonacci numbers, the closer two consecutive numbers which when divided get the answer of the golden ratio. On applying these ratio's to the trading stocks, thus results are produced as primary and secondary. One direction result indicates the primary result and the opposite direction refers to the secondary result.
The retracement levels of the most common Fibonacci numbers in the primary trend are 38.2%,50%,61.8%. The most basic stock charting applications use these standard levels. When once the counter trend rally takes place the retracement levels of Fibonacci behaves as magnets. Excluding these levels there are other levels which provide resistance and those levels are 75%, 78.6%, 87.5%, and 88.7%.
The thumb rule states that the retracement levels makes about 50%, and the earlier mentioned levels attracts the price by behaving like magnets. The price must be analyzed by the persons who are familiar on those levels. Always the prices do not move in constant. Stocks, futures, forex,all instruments which are liquid,will often oscilate in Fibonacci proportions.
Fibonacci ratios may be applied to the Price scale,and also to the time scale of charts.Many traders use Fibonacci ratios with a few simple indicators that can help them to determine probable price turning points,optimum entry,exit and stop-loss levels.
The usage of reversal pattern recognition of price after identifying the primary trend, which coincides with the fibonacci retracement level to prove that the counter trend move has been over. Then the actual lows and double bottom levels are known from the stocks.
In "forex trading",the trader must be aware of the international markets as there can be "risk arbitrage" in the market situations.The trader can use "forex signal trading"for the assistance. In Forex trading,the currency of one nation is traded for that of another.So one needs to be fully aware of the market situations in order to be "forex trading".
For the schooling traders it might be hard for using those applications of Fibonacci towards trading and takes time to make them perfect. Fibonacci retracement levels are being used by many beginning traders, and it is also used by many advanced traders also to become a self-fulfilling of their goals. - 23200
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posted by X - Men @ 5:06 AM
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