How to do Fibonacci trading?

The trick is to add the first two numbers, which equals the third (0+1=1), then continue by adding the 2nd and 3rd which equals the 4th number (1+1=2), etc. Also check out our article on Forex trading for beginners as well! Now that we have introduced the name to all our fellow traders, let us move on to explain how to do Fibonacci trading.

Why do technical analysts use Fibonacci for trading?

It is the presence of the Fibonacci series in nature which attracted technical analysts’ attention to use Fibonacci for trading. Fibonacci numbers may work like magic in some cases, in finding key levels in any widely traded security. Fibonacci's retracement strategy relies on key retracement levels to predict future price movements.

Why do traders use Fibonacci numbers?

But traders are also able to utilize the Fibonacci numbers in a different way. Fibonacci levels can also filter out trade ideas. No trader would want to go long or short in front of a big Fib level and their trade idea would be invalidated due to this situation. Fibs are also be used as a trigger instead of an exact entry.