Fibonacci Forex Trading

Fibonacci forex trading is the main stable of the majority of professional forex trading systems around the world.  This famous numbers sequence is so important that it brings in billions of dollars every year for traders around the world.

If you remember maths in high school you may have heard of Fibonacci numbers, but you were probably never told how they are used for profit.  Your maths teacher probably didn't know anyway!

Fibonacci numbers take their name from the Italian mathematician Leonardo Fibonacci.  These numbers are the sequence of numbers derived by adding a number with the one coming before it i.e. 1,1,2,3,5,8,13,21 and so on.  The interesting fact to use for forex traders is not the numbers themselves but the ratio between them which are always .382 or .618, depending on which number you put next to the other, as the numerator.

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Fibonacci forex trading numbers have something of a mythical proportion in mathematics, because for some reason, nature seems to like these numbers and ratios very much.  Many of nature's creations and patterns, plants and even cyclones look like the graphical representation of Fibonacci numbers.  Even the bone structure in your middle finger has the same ratio between each joint that mimics the Fibonacci numbers.

What's even more astonishing is that these ratios show themselves in forex trading quite often.  It's hard to say why, traders use these ratios to watch for support and resistance levels.  It simply seems that the human mind has a preference for these ratios, so the numbers become a self-fulfilling prophecy.

All of this may seem very complicated and confusing, and it is, but luckily you do not need to be a maths genius to use these correlations to your advantage.  Fibonacci levels are often plotted on your charts automatically, or if they're not, then you can get special software that will plot them for you.

Fibonacci forex trading ratios and levels are a leading forex indicator.  What this means is that forex traders all over the world will be looking for them.  This means that the market will mimic the expectation of these traders, so you can actually predict where the price will top and bottom ahead of time.  Obviously this means opportunity for profit.

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OK, so you probably don't understand everything that's written in this article, but don't let that scare you.  I see all the time that traders try to scare new forex traders by trying to make everything seem very difficult.  This is simply not the case.  Anyone can learn to trade with Fibonacci numbers, or they can at least understand that Fibonacci numbers are a great tool and take advantage of it.

Fibonacci based strategies are also at the core of many forex robots that use scalping (very short term) strategies.  This actually makes sense as Fibonacci numbers can easily be calculated automatically and be traded on.  If you want to learn more about forex trading and forex trading robots, feel free to check out the rest of my site!

Make sure you sign up to receive your free copy of "Beginners Introduction to Forex Trading".  A must read for those interested in getting up to speed with how to trade the forex market.

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Note: Forex Trading is a very risky form of online investment and is not suitable for many traders. Please read the investment disclaimer on Forex trading.  All information on this website is for informational purposes only. The use of this website constitutes acceptance of our terms and investment disclaimer.