Fibonacci calculator is a forex trading tool used in to derive retracements and projections. To make these calculations, one will need the low point and high point values of a trending market. The lowest point the market price gets to before changing course to the opposite direction is known as the support level or the lowest low. This is the point beneath where the value of a security finds it hard to fall to. Resistance on the other hand is the highest point a security can get to before it begins to fall again. It is also known as the highest high. To calculate fibonacci retracements with a fibonacci calculator, the support and resistance values of the security in question are necessary.
WHAT IS RETRACEMENT?
Fibonacci retracement is a method of determining support and resistance in technical analysis of the market. It is a very common trading tool among professional forex traders for determining the strategic places for transactions to be placed. Anyone that understands at least the basis of forex trading knows that the one thing about it is that it is unstable and cannot be predicted. That is why the fibonacci calculator is a huge development in the forex market because it seems to accurately predict trade opportunities in the market almost all the time.
Take the support value of a trending market for instance. As is the nature of forex trading, the support value cannot remain so forever; it will change at one time. When the price of a security falls below the support point, that means that the support has been broken and all concerned are looking forward for a new support point. This is a very crucial point as it is risky to trade a trending market without an idea of when the trend will reverse. In a case like this, one can find the next support point using the fibonacci calculator to find the next support point. What needs to be done is to enter the recent support and resistant points and run them with the calculator to get the retracement value for the next support level in the market.
THE FEASIBILITY OF FIBONACCI TRADING
Traders who have tried using fibonacci calculators to find retracement levels in their trades may have something personal to say about fibonacci trading. Other who have not used the fibonacci trading method before but have heard all about it may still want to know if this tool really works. So far, so good, the fibonacci trading tool does not promise heaven on earth, but it has been of great help to many forex traders. A trial, they say, will convince you.
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