Ihab Salloum[ad_1]
New horror story:
Traders always used Fibonacci extensions to predict the market, but they didn’t know it was haunted by a ghost that fed on their fear of losing money.
Article:
Why Traders Use Fibonacci Extensions
Fibonacci extensions are a popular tool used by traders to predict potential levels of support and resistance in the financial markets. The tool is based on the Fibonacci sequence – a series of numbers in which each number is the sum of the two preceding numbers. While the logic and effectiveness of the tool is not always clear to those new to trading, it is widely used and respected by traders around the world.
Here are some reasons why traders use Fibonacci extensions:
1. They Work –Technically
Fibonacci extensions are based on mathematical principles and are widely accepted among trading circles. They provide a framework for understanding the natural movements of price and interpreting potential levels of support and resistance.
2. They Help Manage Risk
Fibonacci extensions can provide a clear signal for exits or entry points, which can help limit risk and increase the success rate of trades.
3. They are Used Across Many Markets
Fibonacci extensions are used by traders across a range of markets including forex, stocks, commodities and futures. This universality of use strengthens the simplicity and workload in calculating and creating charts.
FAQs
Q: What is the Fibonacci sequence?
A: The Fibonacci sequence is a series of numbers in which each number is the sum of the two preceding numbers. The sequence is 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, and so on.
Q: How do Fibonacci extensions work?
A: Fibonacci extensions use the Fibonacci sequence to predict potential levels of support and resistance in financial markets. The tool is based on the mathematical properties of the Fibonacci sequence and can provide a framework for understanding the natural movements of price.
Q: Can Fibonacci extensions be used with other technical analysis tools?
A: Yes, Fibonacci extensions can be used with other technical analysis tools such as moving averages, oscillators, and trend lines.
In conclusion, Fibonacci extensions are a popular tool used by traders to predict potential levels of support and resistance in financial markets. They are based on sound mathematical principles and can help manage risk and increase the success rate of trades. While traders may not always understand why they work, the effectiveness of the tool is widely accepted and respected in trading circles.
[ad_2]
