Fibonacci sequence is one of the most important technical tools. This is also a part of the technical analysis, which has great importance for many people. On the basis of the result from the analysis you can determine when to open a certain position. It is not necessary to complete at once and that is exactly where Fibonacci can help. In this way, the technical analysis comes in handy when you’re acting. You can earn money based on static data.
Mathematics
Fibonacci is a mathematical figure. This is Leonardo of Pisa who lived from 1170-1250. He discovered that it is possible to have a series of numbers to be drawn on the basis of (P (n) = P (n-1) + P (n-2). The beginning of the series which then arises is: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987, 1597. The interesting thing about this series is the number “phi” that occurs when the ratio calculates between successive numbers. Conversely, the numbers also to share and there will always 1 + ‘phi’ i.e. 1,618.
Trading
The Fibonacci itself can not be used with the numbers 0.618 and 0.382 on the forex market. In addition, you can use two Fibonacci extension ratios, namely 1382 and 1618. In particular, the first two are of great importance in the act. You can use the Fibonacci values due to the fact that many people do this. This sounds a bit strange at first, but it is of the great popularity which ensures that it actually works. Now many people use the Fibonacci ratios to choose their resistance and support levels.
Dealers
Another reason that the Fibonacci levels often prove to work are the dealers who are active. They work differently than you do as a trader exactly reversed, making them go against the trend. When a certain price rises they will have a short position. In general, they are not directly in the full position. This means that they first invest a certain amount and then wait to see what the trend is. Does it even higher than they invest a larger amount. Because of this a few times they develop their full position.
