For those of you new to trading you may have not heard of this before. More seasoned traders have certainly used it in their currency trading strategies because it helps tremendously in making sense of the market movement. In my own trading it’s amazing how much I’ve used the patterns in developing a sense of where the support and resistance lines are likely to appear. If you haven’t guessed it I’m talking about using the Fibonacci sequence of numbers to determine the formation of retracements. It is sometimes called the Secret of the Universe.

Fibonacci was a 13th century Italian mathematician who discovered a self-replicating sequence of numbers that has freakishly high occurrence in nature (flower petals, sea shells, hurricanes,etc), architecture, and human behavior. The human behavior part is where it has been applied to trading and market movement. The focus is on retracements of 38%, 50% and 62% of original market moves that identify Fibonacci retracements. It is incredibly amazing how often you see those patterns when trading almost any market.

To see this pattern in action check out this link now to see movement in the gold market and the Forex Euro following the Fibonacci retracement levels. I’m sure that you will consider adding this to your other currency trading strategies.

Regards,

Colon