Posted by forex at 5:47 AM
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Using Fibonacci Tools
1. Log into your forex account and chart the currencies you are examining. Typically this will be two currencies; the US dollar versus the Japanese yen, for example.
2. Overlay Fibonacci numbers. This will be a menu option on the screen or within the chart.
3. Examine support and resistance lines. A price just below a resistance line means it probably won't go up, although trading currency is risky and just like with stocks, it could break through the resistance line. Similarly, a price just above a support line probably indicates it will go up.
4. Trade if Fibonnaci bands indicate support or resistance. If the price of the yen relative to US dollar is just above a support line, it is probably a good time to execute a buy order. If it is just below a resistance line, it is probably a good time to execute a sell order.