How to Fibonacci Trading Strategy in IQ Option

Fibonacci Trading Tactics, a Practical Example

Fibonacci is the most widely respected mathematicians in history. His descriptions and practical applications on the Golden Ratio remain with us today and they are the very same basis of a number of products of technical analysis. It only would be a good match for you, right?

The market industry is really a living beast, a mob, and also the Golden Ratio describes the relationships between living things.

For someone arm span is in accordance with height is in accordance with leg length et cetera within a manner that's seen within nature time and again.

The commonest use of Fibonacci in technical analysis is that the Fibonacci Retracement. This is the drawing tool applied to measure and divide up and down trends.

Principle principle is this fact ; in a trend There'll be corrections and people corrections might be categorized by their depth in relation in the overall trend. For instance, a trend from point A to point B is measured while using Fibonacci Tool.

The tool projects target levels within that trend utilizing Golden Ratio. These targets are where traders may expect to uncover entry points for trades.

• Key Principle – Fibonacci Retracement levels generally are not signals, they're price targets where signals could be found. A move to the retracement level may end in continuation or reversal betting on underlying conditions.

• Key Principle – Fibonacci Retracement generally are not exact targets, they're general areas during which a signal could be found or an area during which signals can be considered to become “significant”. A bullish candle may mean completely different things when it forms below, at or above a retracement level.

The AUD/USD is presenting a perfect probability to employ this tool. The pair has hit what may or might not be “the” bottom however that doesn’t subject so long as “a” bottom the Fibonacci Tool might help us figure against each other.

To start utilize tool to draw a line from the very best high preceding the recent down trend to one of the recent low, which is the trend We're measuring. You could see below this brings into reality 5 retracements ; 23. 6%, 38. 2%, 50%, 61. 8% and 100% on the measured trend.

Considering that prices are bouncing/consolidating we could utilize retracement lines as targets for entry and exit points.
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Listed below are several possible scenarios :

1. If the prevailing down trend is strong prices are gonna remain low possibly at/near to the 0% retracement line. If it is happening, look into signals to occur at this line.

When it continues to behave as support as well as a bullish signal is generated by candles and/or stochastic, MACD or RSI playing calls is the better thing there is to do. If bearish signals grow to develop and/or maybe the 0% retracement line is broken the down trend is gonna continue. Utilize 0% during this case being a starting point for bearish trades when confirmed by other indicators.

2. If a correction can form prices are gonna move approximately test the very first few line, the 23. 6% retracement level. In the event this happens employ this line as the resistance target.

 If price action begins to form bearish signals below, at or slightly above this line you can get to view it move lower to retest the 0% level. If price action can move above the line or is making bullish signals at or merely below it, you can get to view a move to a higher higher retracement.

3. If price can move above the 23. 6% line we can get to view it move up to a higher higher retracement, the 38. 2% level. Likewise, a break on the 38. 2% level would indicate a move in the 50%. If bearish signals were to occur at or near either of the lines a retest on the previously broken line ought to expected.

4. The 50% level is an important one. Normally, even the strongest corrections are halted at this level. A break above it is surely an indication of full reversal and automatically brings the 100% level into play. At the period traders would look into bullish signals of confirmation under the 50% line.

5. If the correction meets resistance at one of them retracement levels, we can get to begin to see the previously broken line retested as support.

 Bullish action would confirm the support and create a bounce, a break below would likely take prices down to a higher lower retracement.Source:Fibonacci indicator IQ Option Strategy