Forex Day Trading System - The Reality of Fibonacci

 Posted: March 17, 2009 | Categories: Forex Trading Systems  

This is a chart taken from one of our competitors' web sites. They promote the use of Fibonacci Fans and infer that by using them you will be able to discern future price movement with pinpoint accuracy.

Albeit Fibonacci values do have a place in Forex trading.

These values can assist in calculating future price extensions. The question is, how far out in the future? You may have to wait a month or more for the objective to be fulfilled. Be aware that Fibonacci values are extremely difficult to use when trading smaller time frames.

Here are some important questions to ask when comparing programs:

1. Can they trade what they depict live and in front of you? The chart above represents three months of price activity.
2. Can they tell you where price is going today? In other words, simply plotting these values on old charting data does nothing for you today or, more importantly, in the future.
3. What is the average length of time spent in a trade? Be aware you may not have the time or capital necessary to monitor a position for this length of time.

I encourage you to attend one of our free live trading webinars.