In this course, we will explain Fibonacci Retracements ("fibs"), a totally different support/resistance indicator.
In this course, we will explain Fibonacci Retracements ("fibs"), a totally different support/resistance indicator. Fibs are based on certain mathematical relationships, expressed as ratios, between numbers in a series. Their discovery was popularized by the thirteenth-century mathematician Leonardo Fibonacci. They have applications in fields as diverse as biology, music, art, and architecture.
In this course, we will just focus on what’s relevant to trading.
As in any financial market, Forex prices don’t move straight up or down. Instead, they zigzag within their overall longer term trends or ranges, as the market tests recent short term support and resistance. We will review why it is important to study multiple time frames before placing a trade, and how to examine them on a chart.
The simultaneous analysis of multiple time frames helps you can gain a better understanding of what fibs are really measuring and how the price is really behaving.
Suggested Readings:
http://www.dailyforex.com/forex-articles/2011/05/Fibonacci-and-Forex-Part-1/7797
http://www.investopedia.com/articles/technical/04/033104.asp
