Fibonacci retracement calculator is a trading tool that helps forex traders in calculating the fibonacci retracements and extension levels. It is one of the trading tools offered by forex trading platforms to help traders make wise decisions in the process of setting up trades that are profitable.
The fibonacci calculator was invented by Leonardo Fibonacci; a reputable Italian mathematician in the 12th – 13th centuries. His findings made a very important discovery which the whole world of forex industry will remain eternally grateful for. The calculator ha an amazing ability to transform the trading outcome of any trade that is based in retracements, or the wavelike movement of the currency market. With the inevitable movement of the market price in upward and downward direction every now and then, it may be hard to know when it is right to open a position that will be profitable. This is where the fibonacci calculator comes in for traders to comfortable calculate the fibonacci retracement and extension levels in order to pin point areas that are profitable as the market keeps moving up and down.
HOW TO USE THE FIBONACCI RETRACEMENT CALCULATOR
The retracement calculator is used to find areas that will yield profitable trades; specifically the points where retracement that occurred after a continuous move towards one direction will stop and resume its move in the previous direction. The calculator tells the extent to which the currency pair will make a renewed move after the retracement.
The use of this tool requires an understanding of how to trace the tools on the charts accurately. The trader needs to identify the swings of the market price of the security in question and at what levels the swings take place. There are some technicalities involved in picking out these levels of swing low and swing high manually; some traders may get it right and some others may not. Traders that manually pick out these levels must have undergone constant practice on how to do so, and as such are not new traders. If every trader has to do this manually, it means that the new traders will not benefit from this. However, the fibonacci calculator software has made it possible for new and old traders to use the tool with little or no technicalities involved.