Fibonacci scalping is known as a technique employed by the majority of   forex successful traders while intently adhering to their profit protection system.

Fibonacci is often used on longer time frames, but may be profitable on any one of them as long as you tend not to diverge from trading your strategy!

For starters, you need to make sure you know how you can apply the fibonacci tool on a chart. You must use this tool accurately in order to benefit from it.

Examine the chart and determine if it’s an uptrend or a downtrend. We refer here to the charts you observe in the forex market 24 hours a day, the one minute, 5 minute, 60 minutes charts made up of candle sticks. You will have a general trend – either going up = uptrend; or going down = downtrend.

Find the lowest and the highest points. The most important Fibonacci retracement levels are 38.2%, 50% and 61.8%. These levels are used as support and resistance levels.

Using the Fibonacci tool:

  • Press onto it
  • Choose the lowest price
  • Drag the pointer to the highest price

Determine at which Fibonacci retracement level you make your move. The price is estimated to take a U-turn once it hits those different retracement levels and go back to adhering to the trend you used your Fibonacci tool on.

Pick out the level you happen to be preparing to wager on and open your position. The higher the retracement level, the more risk you take on concerning the dollars you set up on that position.

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