The Fibonacci number sequence and golden ratio can be found in nature and traders such committees have applied this theory in the financial markets and were able to achieve millions of dollars by using this unique tool as part of their trading method.
Serial numbers Fibonacci golden ratio is used by many savvy traders today, because this let’s take a look on how to make huge profits by using this method in all financial markets.
Support and resistance levels are crucial for all traders as they help identify entry and exit points during trading.
“Bounce” ratios derived from the Fibonacci sequence Fibonacci numbers and the golden ratio is considered innovative and useful tool for any trader, then why are these big interest.
let’s see .
The application of Fibonacci numbers and the golden ratio in trade
Fibonacci sequence was printed in the book “Libre Apache,” which was written for Fibonacci in the year 1202. In this book the Fibonacci for the first time to provide the Indian numbers – Arabic to Europe, where he replaced the Romanian figures.
Fibonacci sequence numbers based on the following equation:
How many pairs of rabbits that produced from a single pair, if the production of a new pair Each pair since the second month, the production will begin the largest number of pairs of rabbits?
While it is using serial numbers Fibonacci golden ratio to solve this equation.
The result is explained below:
Sequential numerical produced are of great importance in all parts of the world of nature.
After the first few numbers in the sequence, the rate for any number to the next higher number is approximately 0.618 and for the lower number is 1.618.
These figures are known as the golden mean or golden ratio.
Golden Ratio Golden average
These figures are interesting for us as can be seen in several areas, such as biology, art, music, weather and creatures and even architecture.
Examples of the natural things deliberate on the golden ratio:
Missiles and spiral galaxies, hurricanes, DNA molecules, sunflowers and other things in nature.
Percentages of Corrections Fibonacci levels, which is the most important by traders are: 38.2% and 62.8%.
The other to bounce percentages which followed in importance are the 75%, 50% and 33%.
So how it is used by traders?
Well, there are three main advantages are:
1. Fibonacci numbers define exit points
If met three or more of the Fibonacci levels together-price, the stop loss point can be placed higher that the area where the points to the importance of this region both as a support or resistance.
Stop-loss limits using Fibonacci corrections allow traders to set pre-defined exit points, and then they can get out of the market if their accounts were wrong.
This method will help them in trading in an orderly manner and then maintain their capital, which is is central for all traders.
2. Fibonacci levels can determine the volume
Based on a risk-wants to be borne by rolling in his trade, the Fibonacci numbers can determine the volume of trading is, who should be taken depending on the degree of risk they wish to carry around stores in size.
Simplistically, this is because the monetary loss per trading center vary according to these centers that have been opened in the market.
Stop loss near a support or resistance lines point may mean that the trading center, which will open it could have been bigger than the last trading limits are stopping far from the support and resistance lines loss center.
Consequently, traders can report on the trade volume within the framework of capital management rules very easily once they have to put a specific exit points.
3. Fibonacci numbers and profit in every trade
Using Fibonacci numbers, once the formation of a technical models completed in exchange for Fibonacci zone-price, the trader can use these levels to book some profits.
This signal about how far this can go to profits traders booked profits at specified levels.
Sequential Fibonacci numbers advantage is that they are predictive tool: and then they allow traders that have limits on stop loss and take profit targets in advance:
Traders can use this method whether to book profits or reduce losses to the minimum alone, which is essential to make a profit in the near term.
Jean Fibonacci sequence used for this purpose which is further evidence of the important tools to help all traders.
One of the key factors for the success of trade in any market is discipline:
To reduce losses and increase profits and long-term win, you must be traded without the influence of emotions.
Jean was familiar with this matter and all traders now know that emotions may spoil their business plan and we can say that the serial numbers Fibonacci help rolling to stay disciplined.
Is it useful?
Jean realized that the use of Fibonacci numbers to make huge profits and reduce losses while trading, and then succeeded in using them to achieve enormous wealth estimated at more than $ 50 million.
Fibonacci numbers are useful but should be used as part of a general trading and commissions on a plan, for example not only it depends on them where he had another series of innovative tools that mix to achieve amazing profits.
He was one of the most successful traders in history and legend survived so far, many of the skilled traders around the world are still using methods in trade
Then access to these methods and you will be happy you did it.
Not only because they are characterized by innovation, but also they will give you more likely to make a profit which we all seek the mechanism of Traders.