Fibonacci Ratios - Trading Tool

[Neca]

Fibonacci - known as Leonardo Bonacci or Leonardo of Pisa , is the man responsible for popularizing the Indo-Arabic numeral system in the Western world as well as the sequence of Fibonacci numbers.

Fibonacci numbers can be found almost everywhere.

And yes, we also have them in Trading as a very popular tool among traders, universal trading concept that can be applied to all timeframes and markets with countless methods like Spirals, Retracements, Fibonacci Time Zones, Extensions.

Are there any rules how to draw them on the chart?
These are questions asked by many traders, especially those who have no prior experience with Fibonaccis are worried that they are ‘doing it wrong’ and they then don’t use the Fibonacci tool at all.
There is no right or wrong when it comes to drawing Fibonacci and you will also see that different traders use Fibonacci in slightly different ways. But there are some basic steps to follow.

The first and most important step is to find Point A and Point B.
Point A is the origin of a new price or trend move. These are usually swing highs and lows.
Point B is where the trend move pauses and reverse to make a retracement.

We have two main methods when trading Fibonaccis :
1.Fibonacci Retracements
2.Fibonacci Extensions

The most common use for Fibonacci Levels is the regular Retracement strategy. After identifying the ‘A to B’ point, you pay attention to the Retracement level(Potential Pullbacks or Fake Breakouts).

 

[well]

There are many different indicators available, each with their own advantages and disadvantages. It is important to choose an indicator that aligns with your trading strategy and that you understand well.

 

[dragos]

Yep, Fibonacci...as you are looking at fibonacci , the same way other traders are looking on it , aslo the banks

 

[thesimsx]

Im use it fibonacci before to find direction , reversal or breakout , there is a lot of indicator and ive been used it , take a look in tradingview.

 

[Charles Agustin]

Use fibonacchi as part of technical analysis because this technical tools will show you market ranges. The best way to survive in Forex is making portfolio because avoiding mistakes completely is impossible. It makes it difficult for traders to survive for long.

 

[Charles Agustin]

According to my view, fibonacchi is a good indicator that provides traders with point-centric ideas.Use internet and seek advices from experts to strengthen your trading.

 

[rj3245]

fib is realy hard to use when scalping. It takes a long time to draw the lines, then to figure out the levels. By the time I figure them out, the trade is far from the entry!