In this report, we'll look at the history and background of the Fibonacci numbers and the golden ratio, then we will outline three specific money management tips that can help you increase your potential profits.
Support and resistance levels is an important consideration for most traders to identify entry and exit points when trading. Fibonacci retracement "levels" based on the Fibonacci number sequence and the golden ratio is very popular with exactly but many traders?
What are Fibonacci numbers and the golden ratio; The Fibonacci sequence first appeared as the solution to a problem in the Liber Abaci, a book written by Leonardo Fibonacci in 1202 to introduce the Hindu-Arabic numerals used in Europe today are still using the original problem Roman numerals in the Liber Abaci that raises the question: how many pairs of rabbits can be created from a single pair, if every month each mature brings forth a new pair, which, by the second month, becomes productive. The Golden RatioAfter the first few numbers in the Fibonacci sequence, the ratio of any number to the next larger number is approximately. 618 and a smaller number of 1618. these two elements is the golden mean or proportion golden ratio; Its is a pleasure to the human senses and displayed throughout the biology, art, music and architecture.Some examples of natural shapes based on the Golden ratio include DNA molecules sunflowers, snail shells, galaxies and hurricanes.Significant Retracement levels
The two levels of Fibonacci retracement level is considered the most important negotiation is 38.2% and 62.8%. other significant retracement levels include 75%, 50% and 33%; Three gain tips for using the Fibonacci Numbers1. Fibonacci specifies the Stop loss LevelsA trader can use Fibonacci numbers to set stop loss orders.For example, if at least three Fibonacci price levels in a relatively narrow zone may be set to a loss of brake just below or above the zone.
Fibonacci number helps determine stops in the following way, if a trader trades against support zone, if the support zone and the value of TRADE in this zone, negated the trade and where they should be closed.
Setting using Fibonacci retracements stops Gets the feeling of negotiation and gives a pre defined exit point.
2. Fibonacci determines the size of the position
Depending on the risk you are prepared to take per trade, Fibonacci numbers also set size position; for example, if the price is right for a certain level, you might want to have more seats than if the value is further away.
3. Fibonacci determines the objectives
With Fibonacci numbers, completes a pattern against a band Fibonacci you can use to set profit targets for Bank partial stop loss profits or tighten This clear objective levels. for merchants helps to lock in profits; the great advantage of Fibonacci numbers and the golden ratio is the fact that it takes the thrill of negotiation and to specify not only stop losses to exit a market and profit objectives and definition.
W. D. Gann and Fibonacci Trading-the Perfect combination!
A trader to be incorporated into the negotiation of the Fibonacci numbers and the golden ratio was the legendary trader W D Gann. we consider your use of the Fibonacci numbers, Gann negotiation method provides traders with the best combination to seek long term trading profits.
To learn how to increase your winnings by using FOREX Gann methods, visit our Web site: http://www.gann.co.uk
Article source: http://ezinearticles.com/?expert=stephen_todd
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