Using Fibonacci Numbers in Forex Trading

The concepts of the golden ratio and the Fibonacci number sequence have been intriguing mathematicians across the globe for many generations now. Uses for both of these mathematical wonders have been found and one of the most advantageous uses of Fibonacci number sequence has been for Forex traders. This sequence, in short, helps traders to spot turning points in the Forex market well in advance.

The Fibonacci number sequence has been used in Forex trading as a predictive tool and when properly calculated and implemented, it helps enhance the analysis of a Forex market, increasing profitability and decreasing risk.

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History of Fibonacci Numbers

The first instance of the Fibonacci number sequence was as a solution to a problem in the "Liber Abaci", a 1202 AD book authored by Leonardo Fibonacci. The book was a tool to introduce the Hindu-Arabic numerals to the continent of Europe, which was still using the Roman numerals. The book posed a simple mathematical question - What was the number of pairs of rabbits generated from a single pair, if each mature pair produces a new pair monthly, which form the second month would start producing?

Fibonacci number Sequence

The answer to the above question was the sequence of monthly numbers (a.k.a. the Fibonacci numbers) - 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89 and are arrived at as follows:

If Fn is the nth Fibonacci number, then the successive numbers are formed by the addition of the previous two numbers - Fn+1 = Fn + Fn-1, F1 = 1, F2 =

The Fibonacci retracement numbers are also of tremendous importance here. If the number sequence is properly analyzed, it is found that the ratio of a number to the next larger number is 62%. The inverse of the same is 38%. These two percentiles are the famous Fibonacci retracement numbers.

Fibonacci number sequence / Golden Ratio

The Fibonacci number sequence has numerous relationships with the Golden Ratio -

F = (1 + ?5)/2, defined as a constant of nature and was used by ancient Greeks, especially in architecture.

Fibonacci number sequence and Financial market analysis - The relationship

Stock prices across the globe fluctuate perpetually not only because of economic changes but also due to supply/demand and human expectations and valuations. The Fibonacci number sequence has another wonderful research behind it to support its assumptive and predictive functionality in ever changing financial markets.

Vladimir Lefebvre, a mathematical psychologist successfully proved and tested that human beings display negative and positive evaluations about opinions they hold in a ratio that approximately culminates in a phi - 38.2% negative and 61.8% positive - around the Fibonacci retracement numbers and these are rooted in a trader's psyche.

Using Fibonacci number sequence to predict market movements

Human beings, without realizing the same, have behavioral patterns that are perfectly geometrical due to the reason that they are a part of the same nature that is symmetrical. This has been proved with time and research over the years. The ancient cultures of Greeks and Egyptians profoundly believed in the number 0.618 and used it in a scientific manner in construction of pyramids and other architectural marvels that stand tall even today. They believed that this number had profound implications in arts and science.

The frequent occurrence of this numbers in the high and low timings and price resistance points of Forex trading makes it an ideal tool that can be used in technical analysis to identify turning points.

Fibonacci Numbers and WD Gann

Gann is one of the most famous commodity traders who are known to have made over million just by trading in the markets. Gann developed his own methods for trading and formed his own relationships between numbers and prices. His work in this field is known to have been influenced by the Fibonacci number sequence. He placed strong influence on 50% retracements and divided his price actions into 1/8ths and 1/3rds.

Any more technicalities in this article would result in the article being only suited to high profile and technical traders. As an introduction, knowing the above facts would help you leverage better profits in the market.

Using Fibonacci Numbers in Forex Trading

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Forex Trading Tips

Trading Forex is something that is very likely to result in people giving you trading advice, either on the internet, on television, or from people in your daily life. Whether or not these tips should be considered sound trading advice is something you will have to take into consideration before or if you use them. Everyone wants to play the hero and tell you that they just "know" the EURUSD is going down or that they heard a great free Forex tip from someone who is in the know recently. Don't take anything at face value when it comes to Forex trading tips, do the research yourself, make sure everything checks out before acting on any Forex tip you might receive.

One thing that can certainly improve your ability to discern between quality Forex tips and those that are less than genuine, is getting good Forex trading education. If you are armed with a solid Forex education, you will have a much better idea of what successful trading is all about and which free Forex tips you should listen to and which you should ignore.

Forex Tipps

The problem that many traders face is that they start trading with no solid Forex training behind them, they then believe just about any Forex trading tip they hear. This can obviously cause a lot of confusion and emotional trading, which naturally results in much lost money in the market.

One very big factor in determining whether or not you should take any specific Forex tip are the qualifications of the source that you got the tip from. If you get a free Forex trading tip from a professional trader, who you are quite certain makes good money trading the market, you can probably rest assured their Forex trading tips are solid and worth listening to at least. If you read a Forex tip from someone you know nothing about, or from some website you know nothing about, you had better think twice before using this tip, because there is a good chance it is just a ploy to get you to buy something. Also, if someone or some website is telling you that you if you pay them a steep monthly fee they will give you quality Forex trading tips or advice, you should probably consider it a scam. There is a big difference between paying for quality Forex training and paying for simple trading tips. Most trading tips should be free Forex tips, as a tip is not really an in-depth or comprehensive Forex trading education, thus it really is not worth paying for.

Finally, the best Forex tips might be the ones that come from your own research and education, trading is a profession that requires much self reliance and self confidence. You cannot expect to rely on other people for quality Forex trading tips and think you will make a full-time living as a trader. You need to invest in your own Forex trading training and then you can learn to trust your own Forex market analysis.

Forex Trading Tips

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Forex Autopilot System Review

There are plenty of ways to make money on the internet nowadays, but they usually require you to have your own product and website, which involves a lot of your time and energy and which is not even guaranteed to make you money.

Forex Autopilot System is a unique program that allows people who know nothing about trading on the forex market, to make thousands and thousands per month.

Forex Tipps

Forex Autopilot System was created by Mark Copeland, who starting trading forex 8 years ago. He was an analyst at Goldman Sachs's, and while he was there he researched the huge complicated system that the big boy uses to make killer trades for millions of dollars.

He has now researched and came up with the Forex Autopilot System, a simple piece of software able to run on your pc. The system only uses the most advanced technologies, running on hundreds of computers. The system runs on the Meta trading platform, which is the most famous trading platform in the forex world.

You can start with as little as 0 on a real forex account or learn the ropes on a demo account without risking any money at all.

Reliable and consistent, it works everyday even when you are not at home, because it is fully automated, which means you just watch it work for you.

Once your have downloaded the program it takes about 15-20 minutes to setup the system for it to be ready for trading. With the Forex

With autopilot system you can expect to make around 5-25% return per month. And that means with this system you can make 75 pips or 150 pips (00 or 000) per month, it all depends on your trading capital.

Forex Autopilot System Review

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