Italian mathematician Fibonacci is famous for its series fobonacci. Fibonacci series is a series where each number is the sum of the two previous numbers, such as: 1, 1, 2, 3, 5, 8, 13, 21, ...
In the world of forex trading, Fibonacci formula is used as the basis of a trading system known as the Fibonacci forex trading. In this system, the ratio based on the Fibonacci sequence of numbers used, ie 0.236, 0.50, 0.618, etc
These ratios are mathematical proportions prevalent in many places and structures in nature, as well as in many man made creations.
Forex trading can greatly benefit form this mathematical proportions due to the fact that the oscillations observed in forex charts, where prices are visibly changing in an oscillatory pattern, follow Fibonacci ratios very closely as indicators of resistance and support levels; maybe not to the last cent, but so close as to be really amazing.
Fibonacci price points, or levels, for any forex currency pair can be calculated in advance so that the trader will know when to enter or exit the market if the prediction given by the Fibonacci forex day trading system he uses fulfills its predictions.
Many people tries to make this analysis overly complicated scaring away many new forex traders that are just beginning to understand how the forex market works and how to make a profit in it. But this is not how it has to be. I can't say it's a simple concept but it is quite understandable for any trader once he or she has grasped the basics and has had some practice trading using Fibonacci levels along with other secondary indicators that will help to improve the accuracy of the entry and exit point for every particular trade.
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