3 Reasons to Use Fibonacci Trading Strategy

Hi guys, it is good to see you again. In this chance I will write about how to use Fibonacci retracement properly. We will discuss about how to draw Fibonacci tool, selecting key levels on the trading chart to make Fibonacci and finding for trading’s target.
It is very easy to have found the Holy Grail if you are first understood the Fibonacci numbers, and Fibonacci ratio. The general Fibonacci ratio can assist you define a reversal level.

The simple method of plotting Fibonacci
Fibonacci line looks so simple at the beginning. All we have to do is open a trading chart and then plot a Fibonacci from the top to the low. Even though when we use Elliott wave for our trading strategy, we know that there are so many impulsive and corrective movements within the top to the bottom. Therefore, the main system of attaching Fibonacci tool should not be the helpful method for trading.

The main concept to focus on here is that the trading charts are fractal and so are market trend movements. Fractal is a good method of giving that within one big fluctuation higher or lower there is a lot of smaller downward (upward) trends and downward (upward) reversals. Fibonacci tool assists you find where the reversal against the market trend movement run out of strength so you can find good trading levels to trade.

Identifying target
Fibonacci indicator can assist you do 2 kinds. First, when we are trading the reversal, we can find to exit the trade at strong levels or plot our stop at break even in this case we can trade the reversal with small risk. Second, if you trade only in the trend direction, a price action signal of a Fibonacci indicator can give us the bias of the main trend, Fibonacci can give us to open trading position again the market trend at good trading level.

Learning Fibonacci retracement can be very benefit. Find for good trend movements to begin making your Fibonacci indicator as opposed to tops and lows. In further we can continue to manage our trading risk and entry the market earlier than before.