Golden Fibonacci Level

There are several important Fibonacci levels for the trader, he has to take into account, and one of the most important of these levels is 88.6% retracement level. Where the retracement level 88.6% is derived by taking the "average" Golden 0.618, and the square root of his collection, and the collection of the square root of the product, to reach 0.886. Now, when I say that this is the rate of decline of 88.6% Fibonacci "All I mean is that the decline is 88.6% of the initial volume of movement. If the initial move by 100 points higher, will be rolled back by 88.6 points down. 

Fibonacci levels are not biased to any specific time frame, as have the same shelf life, whether you're looking at a graph (table) Weekly long-term or short table for 5 minutes.

Let's start with a weekly Graph of the U.S. dollar against the Swiss franc (USD / CHF).

Fibonacci and Forex U.S. dollar / Swiss franc

Price rose early to point X at 1.1967 on March 8, 2009, then moved down to the low point Y at 0.9909 on November 22, 2009. If the price moves up 2,058 points during the 37 weeks. Price then retreated to point Z at 1.1730, (or 1,821 points) on May 30, 2010, after 28 weeks after point  Y. When you check in the table and figures, it was back to within two points of the 88.6% level. This is terrible because the price moved thousands of points over many weeks and months, and with this, it was able to achieve this exact figure for a key Fibonacci levels.

the Selecting  of this level and a clear vision of the strike may be due to rolling over 1,000 points if it decided  to move with the price down after the retreat ended at the point Z. (If you enlarge the image on the drawing, you will also be able to see that the move was part of a pattern of descending a long-term USD / CHF, which is constantly in fact to this day). Instead, with the knowledge that it has been examined and taken Fibonacci levels main accurately and success, the trader can take a number of trades on the fee short schedules, such as chart four hours and graph time, looking for points of entry to sell the U.S. dollar / franc Swiss. Log on shorter time frames with the use of long-term levels, allows narrower stop loss points, and rates of risk / profit for the better trades.

Likely target for the trading process could be the beginning of the decline or point Y or 100% extension of the initial motion, which will be shortly after the point Y.

Let's now look at the actual trading process you've made on the GBP / USD on the agenda of this 15 minutes:

Fibonacci graph of the 15 minutes in Forex:

I saw that the price was a test level of 88.6%, as is evident from the little blue line on the table. (Thus, it was already an official appears when I was trading). But I did not enter directly. The price has already moved quickly, and I am worried about where you will put the stop loss points for me.

I continued to monitor the charts and the price moves towards the good strengthening, or pattern both sides of the "triangle", distinguished by red lines:

 

Triangle pattern

This enabled me to enter the circulation and tight stop losses just above the triangle, rather than stop the biggest points above the 88.6% level. This gave me the best rate for risk / returns to the trading process, including more than 1:3. In other words, the profit target is greater than 3 times the stop loss point.

In this trading particularly,  I used 100% extension of the initial movement as a profit target. In short, this means that I took the volume of movement  from point X to point 1, and your measured down of 2 point, and it shows in the bottom blue line in the following chart:

 

Fibonacci extension 100% in Forex:

The following graph shows how the trading process unfolded:

 

Fibonacci trading results

Price moves down and reached the profit target after a few hours. The breakpoint losses shortly after 20 points, and the profit target is 80 points.

Abstract:

1. Fibonacci levels can be applied on long tables and short-term.

2.it Can be traded using Fibonacci with other indicators and patterns of other tables.

3. Fibonacci retracement level of 88.6% is particularly strong for trading him alone.