Leonardo Fibonacci And Forex Trading

Forex trading uses something that is called Fibonacci ratios, and these are used a lot. These ratios are just a fraction of the studies done on Fibonacci. Leonardo Fibonacci was an Italian mathematician who became famous for discovering a simple number series that created ratios which described the proportions of things that exist in the universe. This series of numbers starts with two ones, and then the next number is the sum of the two numbers that precede it. These ratios are used in Forex trading, and they make up a large percentage of subjects in Forex. Leonardo Fibonacci was called the greatest mathematician of the Middle Ages, as he contributed greatly to the developement of numbers, and the algebra concept was based on his work in math.

Fibonacci retracement levels are used by Forex traders as support and resistance levels. Hundreds of thousands of Forex traders see the same support and resistance levels, and they place sell and buy orders on the levels to place stops or enter trades. The Fibonacci extension levels are used by Forex traders as profit taking levels. Almost all software that is used for charting Forex includes tools for both Fibonacci extension level and retracement level. However, in order for you to apply the Fibonacci levels to your tradings, it is imperative that you identify the Swing High and Swing Low points. 