# How to apply fibonacci forex

Leonardo Fibonacci is a famous Italian mathematician, founder of a simple series of numbers that refer to ratios valid for natural proportions of things on the planet. If to measure the ratio of any number to one of the next how to apply fibonacci forex number the result will be 0.

618 — are the most important to watch for. Fibonacci Extension Levels are used as targets for taking profit: 0. 618 — here are the most useful for traders. Fibonacci retracement and extension levels carry important information for experienced as well as novice Forex traders as they help to identify entry and exit points during the trade. This chapter will introduce traders to basic rules of applying Fibonacci method in Forex. And now let’s get straight to the point. Where and how to use Fibonacci study on Forex charts?

As you have noticed, there are some A, B, C, D points on the chart. They represent the highest spikes of the price moves or simply highest price swings. To apply Fibonacci study to the price moves we will always look for those points. Forex trading is a high risk investment. All materials are published for educational purposes only.

Fibonacci retracement levels are used as support and resistance levels. Fibonacci extension levels are used as profit taking levels. So, what we will learn today is how to apply Fibonacci tool and how to interpret results that we see on the screen. Fibonacci tool available within their trading platforms. So, click on Fibonacci tool from trading platform that you use.

A — our lowest swing, B — our highest swing. So, we will look to BUY some lots at the good lowest price and go up with the trend. Click on A and drag your cursor to B, click. You must see different lines appeared on your chart. Those lines are called Fibonacci Retracement and Extension Levels. To calculate Fibonacci levels yourself, refer to How to calculate Fibonacci levels. B to some point C, and then continue up in the direction of the trend.