News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Fibonacci Basics

Fibonacci Basics

Richard Krivo, Trading Instructor

Student’s Question:I’d appreciate a quick review of Fib line basics…confused…thanks.Instructor’s Response:Sure…We put Fib levels on a chart so a basic determination can be made as to the point which a currency pair is likely to retrace after a strong move.Take a look at the chart below. A bullish move is shown on the chart so the Fib line would be drawn from the bottom of the move (Swing Low) to the top of the move (Swing High)…the opposite would be true in a move to the downside.

Having done this, the three major Fib levels will be appear on the chart…38.2%, 50.0% and 61.8%. A trader will then wait to see if one of the levels holds…that is, price action stalls at that level. Should one level hold, a long position can be taken back in the direction of the original move with a stop below the lowest wick that penetrated the Fib level that held.

Fibonacci_Basics_body_29279d1241733558-post-day-chart-5-7-09.png, Fibonacci Basics

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.