How To Identify Fibonacci Levels
The Importance of Retracement Levels and Profit Targets
This video shows how to locate Fibonacci retracement levels and profit targets on a chart showing forex price data.
The Fibonacci sequence is a mathematical sequence that occurs often in the natural world, and it is based upon multiplying the previous number by the "magic number" 1.618. This value can also be used in forex analysis, as savvy traders eventually discovered that the levels of 38.2% and 61.8% were values that prices responded to.
Using these Fibonacci levels, it is possible to predict where the market will 'run out of steam,' and you can use these values as stop-losses or profit targets while trading.
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