Forex and Fibonacci

Retracement is a common phrase now heard among traders.  They often connect Fibonacci and his mathematical observations with retracement.

Now watch out.  There are a few new terms that you may see that are Fibonacci retracements, rebranded to sell, with no benefit to you.  There are many free tools out there.  They include Pivot Point, Prediction Points, Swing Marks, Buy or Sell Levels, Trade Levels.  These are just a few common terms that businesses are using to get you to pay for techniques that are old and free.  Now, they may be useful, and paying to learn how to use them isn’t wrong.

Paying for the tool, however, is a huge mistake.  This is something you can replicate and learn to do on YouTube.

All warnings aside, Fibonacci was a great man.  And Fibonacci is a great tool to use for trading.  However, never let it, or its new names, be the only tool in your tool belt.  There are enough uneducated traders out there willing to ‘donate’ their money to the market.  Let them. It is a zero-sum game.  Their losses are your gains.

Let’s examine some other tools that may appear enticing, yet are destructive.  Let’s touch on market news.  Announcements, or consumer confidence, can be very inconsistent.  Oftentimes announcements, with the exact same results, can have completely opposite reactions in the market.  Trading, based on transpiring events, or trying to predict market reactions, is the oldest trading strategy in the book.

There are some announcements that can be traded alone.  And there are what we call “slam dunks.”  But it may take years of practice to differentiate between those and other tempting trades that appear to be “slam dunks”.  Again, market news and consumer confidence are good to know.  But letting this be your only tool, will have you ‘donating’ money to the more experienced traders.

Forex and Fibonacci

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