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.
In primary trend,the most common Fibonacci retracement levels are 38.2%,50%,61.8%.These standard levels are used by most basic stock charting applications.These Fibonacci retracement levels act almost as magnets once the countertrend rally takes place.Apart from above three there are few other levels that can provide resistance.These are 75%, 78.6%, 87.5%, and 88.7% retracement levels.
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.
Then use price reversal pattern recognition after identifying the primary trend, to coincide with the fibonacci retracement level to acknowledge that the counter trend move has been over. Then to know the actual lows and double bottom or break through that level look for stocks.
The trader must have the clear idea and knowledge of the international markets because of the "risk arbitrage" in the existing market situations mainly in "forex trading". For help "forex signal trading" can be used by the trader. While performing "forex rading" the transaction of currency between nations take place, so the trader must be aware of that.
This application of Fibonacci to trading can be very complex for a new beginner and does take time and experience to perfect it.Many floor traders use these Fibonacci retracement levels. These levels are used by many advanced traders as well,it allows them to become a self-fulfilling prophecy. - 23222
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.
In primary trend,the most common Fibonacci retracement levels are 38.2%,50%,61.8%.These standard levels are used by most basic stock charting applications.These Fibonacci retracement levels act almost as magnets once the countertrend rally takes place.Apart from above three there are few other levels that can provide resistance.These are 75%, 78.6%, 87.5%, and 88.7% retracement levels.
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.
Then use price reversal pattern recognition after identifying the primary trend, to coincide with the fibonacci retracement level to acknowledge that the counter trend move has been over. Then to know the actual lows and double bottom or break through that level look for stocks.
The trader must have the clear idea and knowledge of the international markets because of the "risk arbitrage" in the existing market situations mainly in "forex trading". For help "forex signal trading" can be used by the trader. While performing "forex rading" the transaction of currency between nations take place, so the trader must be aware of that.
This application of Fibonacci to trading can be very complex for a new beginner and does take time and experience to perfect it.Many floor traders use these Fibonacci retracement levels. These levels are used by many advanced traders as well,it allows them to become a self-fulfilling prophecy. - 23222
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posted by X - Men @ 6:45 AM
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