Fibonacci Sequence Nothing Mystic - Make Money Online In Forex!
The mathematician Fibonacci or Leonardo of Pisa in 1202 first published his Fibonacci sequence. In order to calculate the number of pairs of rabbits he would have at the end of a year based on their behavior of breeding, Fibonacci developed this famous sequence of numbers. Forex traders find this type of no-nonsense approach very profitable.
While many think of the Fibonacci sequence as a mathematical abstraction, it is grounded in a real world application. The Fibonacci sequence can be used to predict patterns which would not otherwise be apparent.
So how is the Fibonacci sequence applicable to currency investing? Savvy investors know that there are patterns to the movements of the stock and currency markets which can be seen by studying the past behavior of investors. The market truisms "buy low, sell high" is based on an understanding of these market patterns.
Hidden patterns of investment marketing cannot be seen up close. There is no accurate sense in trying to predict the hourly or daily fluctuations of investment markets. However, overall extended trends very well can be. Increased profits are taken advantage of when investors and Forex traders confidently use the number sequence of Fibonacci to reach their gains.
The Fibonacci sequence is a series of numbers in which each successive number is the sum of the two previous numbers. So it goes 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, and into perhaps infinity. There are a number of interrelationships held within these numbers; for instance, any given number is approximately 1.618 times the preceding number, and 1.618 happens to represent the ancient Greeks' "golden ratio"--considered to be the supreme essence of balance (and balance is the ultimate key to successful investing).
Of all the Fibonacci series the two applications in wide spread use by Forex traders and investors are arcs and retracements.
Fibonacci chart technique involves three curved lines drawn for anticipating key resistance and supporting various levels as well as areas of ranging. First drawn is an invisible trendline between the two points of high and low for particular period of time. Next, three intersecting curves are drawn overlapping the trendline at the levels of 38.2, 50, and 61.8 percent according to Fibonacci. When the price of the asset crosses through these key levels, decisions of transaction are made.
Now, a retracement, in investing, refers to a reversal in the movement of a stock's price--a reversal which is enough to counter the stock's prevailing trend. Advanced successful investors pay intense attention to retracement possibilities and patterns. The Fibonacci retracement analyzes the likelihood that a financial asset's price will see a larger than average retracement and then come to support or resistance at the key Fibonacci levels before it then continues on in its original direction. A trendline is drawn between two extreme points; then, its vertical distance is divided by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8%, and 100%.
Multitudes of high-level traders gain with the Fibonacci retracement method. It aids them in finding the most strategic placement of transactions, their target prices and stop-losses. Gartley patterns, Tirone levels and the Elliott Wave theory are other technical tools that make use of retracement.
The Fibonacci formula simply works and is useful while investing. Forex traders worldwide are finding it successful while using it. - 23210
While many think of the Fibonacci sequence as a mathematical abstraction, it is grounded in a real world application. The Fibonacci sequence can be used to predict patterns which would not otherwise be apparent.
So how is the Fibonacci sequence applicable to currency investing? Savvy investors know that there are patterns to the movements of the stock and currency markets which can be seen by studying the past behavior of investors. The market truisms "buy low, sell high" is based on an understanding of these market patterns.
Hidden patterns of investment marketing cannot be seen up close. There is no accurate sense in trying to predict the hourly or daily fluctuations of investment markets. However, overall extended trends very well can be. Increased profits are taken advantage of when investors and Forex traders confidently use the number sequence of Fibonacci to reach their gains.
The Fibonacci sequence is a series of numbers in which each successive number is the sum of the two previous numbers. So it goes 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, and into perhaps infinity. There are a number of interrelationships held within these numbers; for instance, any given number is approximately 1.618 times the preceding number, and 1.618 happens to represent the ancient Greeks' "golden ratio"--considered to be the supreme essence of balance (and balance is the ultimate key to successful investing).
Of all the Fibonacci series the two applications in wide spread use by Forex traders and investors are arcs and retracements.
Fibonacci chart technique involves three curved lines drawn for anticipating key resistance and supporting various levels as well as areas of ranging. First drawn is an invisible trendline between the two points of high and low for particular period of time. Next, three intersecting curves are drawn overlapping the trendline at the levels of 38.2, 50, and 61.8 percent according to Fibonacci. When the price of the asset crosses through these key levels, decisions of transaction are made.
Now, a retracement, in investing, refers to a reversal in the movement of a stock's price--a reversal which is enough to counter the stock's prevailing trend. Advanced successful investors pay intense attention to retracement possibilities and patterns. The Fibonacci retracement analyzes the likelihood that a financial asset's price will see a larger than average retracement and then come to support or resistance at the key Fibonacci levels before it then continues on in its original direction. A trendline is drawn between two extreme points; then, its vertical distance is divided by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8%, and 100%.
Multitudes of high-level traders gain with the Fibonacci retracement method. It aids them in finding the most strategic placement of transactions, their target prices and stop-losses. Gartley patterns, Tirone levels and the Elliott Wave theory are other technical tools that make use of retracement.
The Fibonacci formula simply works and is useful while investing. Forex traders worldwide are finding it successful while using it. - 23210
About the Author:
Richard U. Olson recommends the state of the art Forex Expert Advisor that he uses to make consistent profits in the Forex markets. Grab his FREE e-course on The Crucial Facts On Forex Trading to realize your financial dreams.
posted by X - Men @ 12:30 PM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home