Forex trading uses something that is called Fibonacci ratios, and these are used a lot. These ratios are just a fraction of the studies done on Fibonacci. Leonardo Fibonacci was an Italian mathematician who became famous for discovering a simple number series that created ratios which described the proportions of things that exist in the universe. This series of numbers starts with two ones, and then the next number is the sum of the two numbers that precede it. These ratios are used in Forex trading, and they make up a large percentage of subjects in Forex. Leonardo Fibonacci was called the greatest mathematician of the Middle Ages, as he contributed greatly to the developement of numbers, and the algebra concept was based on his work in math.
Fibonacci retracement levels are used by Forex traders as support and resistance levels. Hundreds of thousands of Forex traders see the same support and resistance levels, and they place sell and buy orders on the levels to place stops or enter trades. The Fibonacci extension levels are used by Forex traders as profit taking levels. Almost all software that is used for charting Forex includes tools for both Fibonacci extension level and retracement level. However, in order for you to apply the Fibonacci levels to your tradings, it is imperative that you identify the Swing High and Swing Low points.
Leonardo Fibonacci was famous for mathematics, and his mathematics are famous in Forex trading. There are numerous Fibonacci principles that are applied when dealing with the Forex trading market, and using these principals can greatly improve your ability to make an informed decision when you are trading on the forex market. Fibonacci ratios are applied to targets, as well as numerous other factors in Forex trading.
If Leonardo Fibonacci had not been the mathematical genius that he was, Forex trading might not exist today and the world would be a completely different place. Fibonacci numbers and ratios are an important part of Forex trading and analysis. Fibonacci retracement level and Fibonacci extension level are a tool used by traders in the Forex market to help them control the risks and profits of trading in the Forex market. Leonardo Fibonacci has made a very important contribution to the world of market trading, and his contribution is used in the Forex market on a daily basis by hundreds of thousands of traders.