What is Fibonacci in forex

Fibonacci levels are commonly used in forex trading to identify and trade off support and resistance levels. After a significant price movement up or down, the new support and resistance levels are often at or near these trend lines.

What are Fibonacci trading levels?

From a trading perspective, the most commonly used Fibonacci levels are the 38.2%, 50%, 61.8% and sometimes 23.6% and 76.4%. In a strong trend, which we always want to be trading, a minimum retracement is around 38.2%; while in a weaker trend, the retracements can be 61.8% or even 76.4%.

Fibonacci Numbers

Fibonacci numbers are nothing but a series of natural numbers, beginning with 0 and 1 and continuing infinitely. Each next number in the series is derived by adding two previous numbers. Hence, the numbers formed are:

0 + 1 = 1

1 + 1 = 2

1 + 2 = 3

2 + 3 =5

3 + 5 = 8

5 + 8 = 13

8 + 13 = 21

13 + 21 = 34

21 + 34 = 55

34 + 55 = 89

55 + 89 = 144, and the sequence extends to infinity.