The story behind the Fibonacci sequence and its advantages
The Fibonacci calculator was invented by Leonardo Fibonacci – one of the first major mathematicians in early 13th Century Europe. Hailing from Italy, his theory of numerical patterns sparked intrigue and to this day, has been used as one of the most powerful trading methods in the Forex market.
The Fibonacci calculator is an application of the Fibonacci sequence, which is, simply put, a sequence of numbers where each successive number is the sum of the previous two.
The basic Fibonacci progression would always go as follows: 1, 1, 2, 3, 5, 8, 13, 21, 34, and so on to infinity. This ongoing relationship between the values is represented in statistics as the Greek letter Phi (φ), known as the golden ratio (1.1618034)
The Fibonacci sequence was observed to create a unique pattern and many aspects attached to it have been applied to different areas which of course, includes trading.
By identifying support and resistance levels, the Fibonacci calculator is a mainstay of forex analysis tools, allowing professional traders to predict and find correction targets and trend direction in the price chart. With this information, traders get to evaluate the situation in the markets and can choose whether to buy, sell, or continue to wait depending on their analysis from the Fibonacci levels.
Do keep in mind, however, that Fibonacci levels are to be taken as a technical analysis indicator of the Forex market determining points on the graph where breakdowns or rebounds should happen beforehand. Traders also set stop-loss and take-profit at the Fibonacci levels, potentially making their chances of success slightly greater.
Apply Advanced Analytics with The Fibonacci Calculator
Computing retracements and extensions traditionally is a challenging task to complete successfully in a live market environment. Luckily, the Fibonacci calculator can rapidly and precisely generate the desired levels regardless of currency pair, volatility or trend direction.
There are a number of analytic tools that are applied in the arena of active trading and Fibonacci retracements and extensions are one of the more popular among forex participants. Its fundamental flexibility ensures that they can be readily applied to almost any strategy while also offering excellent trade management by determining areas of stop-losses and take-profit targets.
In basic terms, the Fibonacci calculator calculates support and resistance levels based on major and custom Fibonacci values.