Thursday, May 28, 2009

Fibonacci Trading

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Thursday, May 28, 2009 Forex Technical Analysis 2:53 AM
Traders use the Fibonacci retracement levels as support and resistance levels.
Fibonacci retracement levels are 0.236, 0.382, 0.500, 0.618, 0.764

Since so many traders watch these same levels and place buy and sell orders on them to enter trades or place stops, the support and resistance levels become a self-fulfilling expectation.

Traders use the Fibonacci extension levels as profit taking levels.
Fibonacci extension levels are 0, 0.382, 0.618, 1.000, 1.382, 1.618

since so many traders are watching these levels and placing buy and sell orders to take profits, this tool usually works due self-fulfilling expectations.

In order to apply Fibonacci levels to your charts, you’ll need to identify Swing High and Swing Low points.
you can see explanation with video clip below here:

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