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.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Bitcoin
Mixed
More View more
Real Time News
  • It looks like today is the day that equity investors have begun to worry about the uncertainty around Coronavirus. Talked about this in Thursday webinar, $SPX futes slammed ahead of the open. Longer-term trendline coming into play (image 2, from weekly S&P chart) https://t.co/E2nC8Eia1F
  • Housing data may be more heavily scrutinized in 2020 as softer global growth places more stress on the consumer to keep the American economy afloat. Get your market update from @ZabelinDimitri here: https://t.co/ms4EGbJ1WF https://t.co/C6Ktg3F9oW
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.76%, while traders in USD/CAD are at opposite extremes with 67.78%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/Hsk9W0ixNu
  • Commodities Update: As of 11:00, these are your best and worst performers based on the London trading schedule: Gold: 2.48% Silver: 1.70% Oil - US Crude: -3.85% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/lv48SWJhlR
  • EUR/USD Eyes Correcting Higher, Watch This Price – Euro vs US Dollar Outlook More details in the link below: https://www.dailyfx.com/forex/technical/home/analysis/eur-usd/2020/02/24/EURUSD-Eyes-Correcting-Higher-Watch-This-Price-Euro-vs-US-Dollar-Outlook-MK.html?CHID=9&QPID=917714 https://t.co/i9WmlG9Tqz
  • Forex Update: As of 11:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.29% 🇨🇭CHF: -0.23% 🇪🇺EUR: -0.27% 🇬🇧GBP: -0.50% 🇳🇿NZD: -0.54% 🇨🇦CAD: -0.55% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/J6Nehg0Jue
  • Indices Update: As of 11:00, these are your best and worst performers based on the London trading schedule: US 500: -2.70% Wall Street: -2.78% Germany 30: -3.64% France 40: -3.74% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/AEmugA7rWD
  • Angela Merkel's party are to hold a special convention on April 25th to pick a leader $EUR
  • RT @ABartonMacro: 🇰🇷📉 Monday's Korean equity flows, per Yonhap 👇🏻 - Foreigners dumped a net KRW782bn - Domestic Institutions bought a net K…
  • Myth or fact? One thing is for sure, there are a lot of misconceptions about trading. Knowing the difference between common trading myths and the reality is essential to long-term success. Find out about these 'myths' here: https://t.co/EDvQdHfIPm https://t.co/UGggGxOjEC
Fibonacci Fundamentals

Fibonacci Fundamentals

2011-04-27 02:15:00
Richard Krivo, Trading Instructor
Share:

Student's Question:What is the purpose of the Fibonacci Tool and how do you use it? Thanks.Instructor’s Response:The purpose of the Fibonacci Retracement Tool is to be able to make a determination as to how far a currency pair is likely to retrace after a strong move in either direction. This is helpful since it will allow us to make an entry decision so we know when to enter (or re-enter) a trade when the overall trend once again comes into play.Take a look at the chart below…

Fibonacci_Fundamentals_body_chart_4_27_11.png, Fibonacci Fundamentals

On this chart we see a long, bullish move to the upside of about 1000 pips. We would draw the Fib line (the red line) from the Swing Low (the lowest point of the move) to the Swing High (the highest point of the move). Our Fibonacci Tool then puts the Fib Levels on our chart.

If we are using the Fib Tool in a downtrend, we would do the opposite of the above. We would draw the Fib line from the Swing High of the move to the Swing Low.As is noted on the chart, when the pair retraces, it can likely retrace to one of these three levels: 38.2%, 50.0% or 61.8%. We would put the tool to use in a trading scenario by waiting until price action trades to one of those Fib levels and then shows a “bottoming pattern”. For example, some candles with long wicks below the bodies, dojis, spinning tops or a Morning Star bullish reversal pattern would be a couple of examples showing that the pair has, perchance, bottomed and is looking to reverse.We could then take a long (buy) position back in the direction of the overall trend. Our stop would go just below the lowest point that price action penetrated a Fib level during the retracement.

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

DISCLOSURES

News & Analysis at your fingertips.