The Fibonacci puzzle that introduced the fibonacci sequence in the western part of the world was concerned with rabbits – how many pairs of rabbits will there be in one year starting from one pair, if they would all produce offspring continuously the minute they were able to do it.

In forex, using fibonacci sequence we are interested pretty much in the same thing, but instead of rabbits, we want to multiply the amount of money in our accounts.

First you have to understand how to implement the fibonacci tool on a chart. You have to use this tool accurately in order to profit from it.

Examine the chart and come to a decision if it’s an uptrend or a downtrend.

Forex Charts:

  • one minute
  • 5 minutes
  • 60 minutes

We refer here to these charts filled with candle sticks. You will see a general trend – either going up = uptrend; or going down = downtrend.

Find the lowest and the highest points  – you have the  % and 100% retracement levels. Crucial fibonacci retracement levels are 38.2%, 50% and 61.8%. Those levels are used as support and resistance levels.

Apply the fibonacci tool which is a part of the trading program you’re utilizing. Select your fibonacci tool by pressing onto it.  After this you choose the lowest swing  price and drag the pointer to the highest swing or the other way around – depends on the trend.

Decide at which fibonacci retracement level you make your move. The higher the retracement level, the greater risk you take concerning the cash you place on that position.

If you want to find out more information, access these resources:

Fibonacci Forex Trading
Forex Scalping Method
Forex Day Trading Tips