Fibonacci
Studies
Fibonacci Retracement
- Fibonacci Retracements are displayed by selecting two extreme points
on a forex chart, for example, a trough and opposing peak. A series
of three horizontal lines are drawn intersecting the trend line at the
Fibonacci levels of 38.2%, 50%, 61.8%.
After a currency
moves significantly in price (either up or down), it will often retrace
a portion (if not all) of the original move. As prices retrace, support
and resistance levels often occur at or near the Fibonacci Retracement
levels.
To use this function,
select a position for the first point on the forex chart and click on
the chart once and then select another position for the second point
and click on the forex chart again. Fibonacci Retracement figures will
be shown on the chart underlined in green and as well as on the top
left portion of the chart.
Fibonacci Projection
- Fibonacci Projection calculation needs a total of 3 points. The first
two points are used to calculate the distance of the first move (shown
in example below), while the third point is the starting position of
the projection. The purpose of Fibonacci Projections is to estimate
where the current move may end. The following is an example of the result
of selecting 3 points on the forex chart, clicking one after the other,
with the last being the start of the projection. Fibonacci projection
figures of 61.8 %, 100% and 161.8% (as a percent of the first move)
will be shown on the chart underlined in blue, as well as on the top
left portion of the chart. (Some of the lines may not be visible because
they will be off the scale.)
Erasing Fibonacci
functions - The next button (ninth) is used to erase one or both
of the Fibonacci functions from the forex chart.
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