Welcome to Part 8 in the Price Action Traders Mindset series. For those that are here, viewing this series for the first time I highly recommend starting from the beginning.
In this part we go over one of the most popular and controversial tools in the Forex industry. In some cases it can even be referred to as the wonder tool. That tool is called the Fibonacci Retracement Tool. A tool that if used right can help give the trader insight into where the trend may continue on a pair.
Do you see how i just highlighted the word trend in the previous sentence, you see this tool should only ever be used in trending environments. Using in other types of trading environments can be either dangerous or simply not effective, so establishing the trend bias first before using this tool is always best.
In the video above I go over this tool in detail and show how in two markets randomly selected the market seems to respect certain Fibonacci tool values. As seen in the video as well, you will see how the gold number to watch for in trends is the 50% zone to the 61.8% zone area on any retracement. This is a strong turn around zone for many pullbacks in the market.
Understanding Fibonacci – Beginners Definition
Those wondering exactly what Fibonacci is, let me give a quick rundown. It is a variable of numbers that often repeat in all forms of nature, space and time. It also correlates to many aspects of human behavior, plus when used in trading can often measure levels of psychological resistance or support. Therefore understanding this tool in trending markets can be very beneficial overall.
… On another topic, just wanted to let you all know that The Engulfing Trader Training Series and DVD is officially available for purchase. For those that have not checked this out just yet or have not purchased this series just yet, you can find out all about it by clicking here.
Thanks for reading, watching and subscribing, part 9 will be coming in the next upcoming week so stay tuned to get more.