Forex traders widely use something called Fibonacci ratios. These ratios are just a fraction of the studies done on Fibonacci. Leonardo Fibonacci was an Italian mathematician who became famous for discovering a simple number series that created ratios which described the proportions of things that exist in the universe. This series of numbers starts with two ones, and then the next number is the sum of the two numbers that precede it. These ratios are used in Forex trading, and they make up a large percentage of subjects in Forex. Leonardo Fibonacci was called the greatest mathematician of the Middle Ages, as he contributed significantly to the development of numbers, and the algebra concept was based on his work in math.
Forex traders use Fibonacci retracement levels as support and resistance levels. Hundreds of thousands of Forex traders see the same support and resistance levels, and they place sell and buy orders on the levels to place stops or enter trades. Forex traders use the Fibonacci extension levels as profit taking levels. Almost all software that is used for charting Forex includes tools for both Fibonacci extension level and retracement level. However, for you to apply the Fibonacci levels to your trading, it is imperative that you identify the Swing High and Swing Low points.
Leonardo Fibonacci was famous for mathematics, and his mathematics is outstanding in Forex trading. Numerous Fibonacci principles are applied when dealing with the Forex trading market, and using these principals can significantly improve your ability to make an informed decision when you are trading on the forex market. Fibonacci ratios are applied to targets, as well as numerous other factors in Forex trading.
If Leonardo Fibonacci had not been the mathematical genius that he was, Forex trading might not exist today, and the world would be a completely different place. Fibonacci numbers and ratios are an essential part of Forex trading and analysis. Fibonacci retracement level and Fibonacci extension level are a tool used by traders in the Forex market to help them control the risks and profits of trading in the Forex market. Leonardo Fibonacci has made a significant contribution to the world of market trading, and his contribution is used in the Forex market daily by hundreds of thousands of traders.
You can use our Fibonacci calculator to generate basic Fibonacci retracement values.