ArticlesBase.com - Free Articles Directory
Free Online Articles Directory
06.09.2008 Sign In Register Hello Guest
Email:
Password:
Remember Me 
forgot your password?


Forex Trading Using Fibonacci Retracement Zones...

Author: Sam Beatson Author Ranking Blue | Posted: 14-10-2006 | Comments: 0 | Views: 478 | Rating:  (61) Article Popularity - Blue (?) Got a Question? Ask.
Sign Up Now!

What forex day trading signals do you use to enter and exit the market?

How do you know that they are not going to give you a false entry signal?

How can you use these signals to exit your trade?

Let's look at Fibonacci first of all. This 750 year old "natural order" of numbers reflects the birth of rabbits in a field, the number of rinds on a pineapple, the sequence of sunflower seeds. So how do we apply it to forex trading?

First of all we need to understand that Fibonacci is a commonly traded forex day trading signals indicator. The ratio given by the Fibonacci numbers are converted into a percentage. The Fibonacci sequence of numbers is 1,1,2,3,5,8,13,21,34,55,133,222 etc. adding the left number to get the next number in the sequence. When we apply Fibonacci to our charts, we take a particular market move of say 50-100 points and plot the Fibonacci ratio levels.

This brings out levels of potential support and resistance on to our charts. The top of the move is considered "0%" of the move and the start of the move is considered as "100%". We then have Fibonacci "retracement" levels at 23.6%, 38.2%, 50% and 68.1%. These "retracement zones" can give us forex day trading signals.

If the price has moved down say 70 pips and then retraces we can say that the strongest Fibonacci point of resistance is at 23.6% and if the price is going to stop and reverse back to the original direction after the correction. If we break the 23.6%, then the 38.2% is the next strongest resistance level then the 50%. If we hit the 23.6% resistance line and the price "bounces" back downwards, we can start thinking about whether this was just a correction – a Fibonacci retracement.

It is not enough just to know the price has hit the line of resistance and bounced back though. We should also try to get an indication that the strength and momentum of the market is also in favour with our theory. For this, we could have a slow stochastic oscillator, a MACD and a RSI just as an example to give us an indication of the weight of our reentry into the trade or late entry based on the retracement idea.

You would be surprised at how accurate the Fibonacci method of trading is in terms of how history repeats itself again and again in the forex market. It is very tempting to exit a trade when the price turns the other way, however it is worth utilising Fibonacci to ensure it is not a minor (23.6%) retracement and allowing the trade to run it's full course.

Rate this Article: Current: 0 / 5 stars - 0 vote(s).

Article Source: http://www.articlesbase.com/finance-articles/forex-trading-using-fibonacci-retracement-zones-63225.html

Print this Article Print article   Email to a Friend Send to friend   Publish this Article on your Website Publish this Article   Send Author Feedback Author feedback  
About the Author:
Sam Beatson is "The Master Forex Trainer" and runs FastTrackForex.com They'll be no "holy grail" style education and guesswork. You can take advantage of this "one-of-a-kind" course by going to click here or signing straight up for full online coaching, training and email tutorials via http://www.fasttrackforex.com/special
Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free!

Article Comments

Comment on this article Comment on this article
Your Name
Your Email:
Comment Body
Enter Validation Code: Captcha


Related Articles

My Favorite Trading Strategy
By: Lance Beggs | 20/05/2008 | Finance
What I'd like to do in this very short article is give you an overview, looking at the strategic level, of how I trade my favorite setup, which will be the one referred to in most of the analysis on my website. We're talking, 'the big picture'. Too many people make...

Trading Psychology - Doubt
By: Lance Beggs | 20/05/2008 | Finance
I want to talk about a common theme that's in many of the email questions I get through my website. Many people have bought a trading system, or a couple of books, or attended a seminar, and just not achieved the success they thought they'd get. These people are now trapped...

Spot Forex Trading Part 3: Parallel and Inverse Analysis
By: Mark Mc Donnell | 16/05/2008 | Currency Trading
Very few spot forex traders conduct any form of parallel and inverse analysis of the major pairs and exotics to determine the best way to trade the forex on a day-to-day basis. Even though it would be nearly impossible to trade the forex successfully not knowing where the overall strength and weakness was in the spot forex across multiple pairs.

Price Analysis - A Top-Down Approach
By: Lance Beggs | 20/05/2008 | Finance
In a previous article I mentioned that my analysis involves monitoring price action, in order to gain an insight into the short term sentiment of the market. Determining who is in control at that time - the bulls or the bears. And assessing how they're likely to respond to changes...

Spot Forex Trading Part 4: Multiple Timeframe Analysis for the Spot Forex
By: Mark Mc Donnell | 16/05/2008 | Currency Trading
Multiple time frame analysis (MTFA) is the inspection of trend indicators, starting with the largest trends and timeframes, and working backwards down through successively smaller timeframes to see how the smaller timeframes and trends feed the larger ones. When the smaller timeframes are in agreement with the larger trends you can enter a spot forex trade. If no trend exists the smaller timeframes and trends will, at some point, build a larger trends.

Forex Tracer - Automatic Wealth Building Robot Review
By: Robert Strakkenn | 18/07/2008 | Finance
Forex Tracer has become a very popular Forex trading system. It is also touted as being one of the best selling Forex trading systems available. I do want you to understand one thing before we continue to hear. My goal is to present to you the most objective review that I...

Forex Trading System - What You Have To Choose To Be A Success Trader
By: Sayid Aksa | 05/09/2008 | Currency Trading
Choose forex trading system correctly to become a successful forex trader

Day Trading – Will not Make you Money - Here's Why
By: Sacha Tarkovsky | 20/02/2007 | Investing
I keep reading about day trading and how great it is, but the fact is ask for a day trader for a real time track record of profits over a long period of time and you wont get one. Why? Because day trading is a mugs game – don't believe this read on and find out.

Got a Question? Ask.

Ask the community a question about this article:

Frequently Asked Questions

Think the "wisdom of the crowd" principle can pick winning stocks?
By: XiFu | 05-09-2007
A new website business just announced on CNBC allows members to pick and analyze their own stocks, manage a $1MM portfolio, and track their results. Those members that consistently beat the S&P 500 index can earn money from the site itself. The company intends to use the "wisdom of the crowd" principle for hedge funds to utilize.You can check it out hereSo what do you guys (and gals) think? Would you trust a stranger to help pick stocks for your investment portfolio?

Q&A Powered by:
Powered by Yedda 

Latest Finance Articles

Overseas Property Buyers Loving the Credit Crunch
By: Nicholas Marr | 06/09/2008
International real estate industry has been bracing itself for the global slowdown but as author Niocholas Marr explains for some this is the nest time to make that purchase of an overseas property

Net Operating Income and Real Estate Analysis
By: James Kobzeff | 06/09/2008
Discover the various ways net operating income gets used in real estate investing and learn how each is calculated.

Financial Security Planning in Uncertain Job Climates
By: Marilyn Katz | 06/09/2008
Nobody can predict every possible emergency or financial problem, but every can do their best to plan for the unexpected.

3 Things You Need to Know About Secured Credit Cards
By: Sean Masterson | 06/09/2008
Think you understand the ins and the outs of secured credit cards? There's actually quite a few misconceptions that many have about these particular financial tools. If you want to make an informed credit card decision when choosing a secured card, there are three things you absolutely must know.

Stock Market Volatility Helps In Making Money Using Stocks
By: Amit Kheterpal | 05/09/2008
Anyone who has ever ventured into the stock market would have gotten to know by now that the index can go up and down on any given date. That gyration can actually help you make good returns on the stock market.

Tips On How To Diversify Your Risk In The Stock Market
By: Amit Kheterpal | 05/09/2008
Stock market is not for the faint hearted they say. That is definitely correct and a lot of people who join the stock market bandwagon hearing stories about loads of money to be made usually are the ones who burn their fingers in the stock market very easily.

Making the Most of Your Business Banking Relationship
By: Ann Knapp | 05/09/2008
Anyone who owns a business can appreciate the need for a bank account to handle bill paying, deposits and payroll. But banks can assist business owners in so many other ways as well. In fact, having a reliable financial partner can help a business reach its greatest potential, as well as provide support during times of financial need.

10 Sound Budgeting Tips to Ensure Financial Freedom
By: Michael New Jr. | 05/09/2008
Here are 10 sound budgeting tips that will surely get you on the right track again. If you're in trouble with debt, this article is a must read!

More from Sam Beatson

Becoming a Forex Trader in the Competitive World of Forex Trading
By: Sam Beatson | 24/06/2008 | Management
In the current economy many individuals have become interested in the world of foreign exchange trading. The potential to profit and succeed in the world's foreign exchange market is an incredible lure to many. In addition to the financial success and profit that might be gained many are interested in...

Sedona Method Six Steps - What The Sedona Method Is...
By: Sam Beatson | 14/03/2008 | Self Improvement
As taught by Lester Levenson to students of his original Method - the Sedona Method's Six Steps.

Trading Like A Bank Trader From The Comfort Of Your Home - The Real Secrets Of Forex
By: Sam Beatson | 04/03/2008 | Currency Trading
There is a whole load of people trying to cash in off the "opportunity" of trading forex these days. Most of them are marketers, some of them are failed traders, but a minority are exceptional traders who would shock the banks themselves if the banks knew their results.

Forex Trading Software - Does It Work?
By: Sam Beatson | 31/01/2008 | Business
Forex traders in the retail investor market tend to seek a "holy grail" solution to the challenge and stress of being a good forex trader. Forex trading software offers a solution to trader's woes by making it very simple to generate signals and to use technical analysis of the market...

How To Release Your Way To Success Using The Sedona Method
By: Sam Beatson | 31/01/2008 | Self Help
In the 20th century, there was a physicist named Lester Levenson who taught happiness, joy and effortless getting of what you want in life or as he put it "going free." He had a number of students some of whom, such as Hale Dwoskin and Larry Crane have gone on...

How To Make More Money... Fast!
By: Sam Beatson | 31/01/2008 | Self Help
Did you know you can "tune up your brain" in order that you practically force yourself to feel good about finding ways and means to make more money? Whether you want to make more money on the internet, or make money in a home based business, or simply start finding...

5 Ways To Attract More Abundance By Being Grateful...
By: Sam Beatson | 17/11/2007 | Self Help
Being grateful on a daily basis for just one week is clinically proven to have had benefits lasting for six months or more by studies by clinical psychologists in the academic field of positive psychology. Spiritual masters have known and advocated gratitude for literally millenia. Personal development gurus also state...

How To Instantly Learn
By: Sam Beatson | 16/11/2007 | Self Help
Cognitive behavioral therapy has a lot of research behind it. Because of this very large call for cognitive behavioral therapists to work from government administered health services. This article will briefly cover the cognitive behavioral therapy model so the reader can apply it to any life situation of their choosing. It...

Article Categories






Give Feedback

Sign up for our email newsletter

Receive updates, enter your email below