misanalysis of certain support levels. With my method I still have losing trades, but overall it works for. Here, volatility is high. Out of the thousands of price waves that occur in various markets each day, some are bound to reverse at one of these levels, or close to it, simply by chance. So, what we will learn today is how to apply Fibonacci tool and how to interpret results that we see on the screen. There we will place our BUY order. Be sure to practice with them and test them out in a demo account before incorporating them into your trading plan or using real capital.
Use Fibonacci Retracements in any liquid market and on any time frame. The price must at least touch.382 Fibonacci retracement level. Let's take a look at an example in the euro/Canadian dollar currency pair.
Copyright m, all Rights Reserved, forex trading is a high risk investment. Fibonacci retracement levels are used as support and resistance levels. Many traders ask How to install Fibonacci indicator/tool. By keeping tabs on the long-term trend, the trader is able to apply Fibonacci retracements in the correct direction of momentum and set themselves up for great opportunities. The most common.618 extension level, but when the price shows good potential to reach next.000 or even.618 level, you can leave your trade to get that target too. That big green bar engulfs that prior big red bar, and that is all I care about. Dont try to force a tool to work if it isnt working; you dont need to use Fibonacci levels to trade successfully. Figure 1: A Fibonacci retracement applied to price action in the euro/Canadian dollar currency pair. Sticking to longer timeframes when applying Fibonacci sequences can improve the reliability of each price level. In figure 1 for example, the price slightly overshoots the.8 level. Those three dotted lines (0.618,.500,.382) at the bottom on our picture shows three Fibonacci retracement levels where we expect the price to take a U-turn and go up again. So, we will look to BUY some lots at the good lowest price and go up with the trend.