Fibonacci forex trading is the basis of many forex trading systems used by a great number of professional forex brokers around the globe, and many billions of dollars are profitable traded every year based on these trading techniques.

Fibonacci was an Italian mathematician and he is best remembered by his world famous Fibonacci sequence, the definition of this sequence is that it’s formed by a series of numbers where each number is the sum of the two preceding numbers; 1, 1, 2, 3, 5, 8, 13 …But in the case of currency trading what is more important for the forex trader is the Fibonacci ratios derived from this sequence of numbers, i.e. .236, .50, .382, .618, etc.

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Many people just jump into Forex without taking time out to learn the basics. This is why these days you will find still find traders in losing positions by as much as 40% several months after you’ve given them trade the same trade signals that probably fetched you 20% monthly even though you started with them with the same capital base on the same platform, traded the same FX markets using the same Forex trading systems.

It’s surprising how different people could have similar opportunities yet get completely different outcomes or results. The real answer to successful currency trading is inherent in every trader. Success in Forex trading is your personal responsibility and not that of your Forex trading systems or any external factor. If you’re going to make it in the foreign currency trading business, then it’s up to you.
You need to understand the truths about Forex trading to be able to see through the big picture. It’s really that important if you must succeed in this home business especially for a Forex trader still trading losses. Once, you can grab these foundational truths about the FX markets, and then you’re already on the road to success. This should actually be your first major step.

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Fibonacci, Actually named Leonardo of Pisa, was born in Pisa, Italy about 1175 A.D.. Today, he is recognized as the greatest European mathematian of the middle ages. Fibonacci is credited with introducing the Arabic-Hindu numeral system to Europe. He also introduced the decimal system. Both became the basis of mathematics we use today. Enough background for now.

Although Fibonacci covered an entire realm of mathematics, the main numbers used in trading are actually percentages. The percentages are 38.2%, 50%, and 61.8%. These areas are viewed as trend retracement points. The most commonly held theory is that a 38.2% retracement of a trend is a failed reversal and theoverall trend should continue. A retracement to the 61.8% mark signals that the retracement is the beginning of a new trend. The 50% level is used for different strategies if confirmed by several other forex indicator signals.

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Before, the forex market was limited only to long-term investors, banks and people who have greater capitals. The trading occurs via an agent or voice broker who will inform clients on what is going on. Later on, it was been replaced by a computerized automated systems. This was the early form of forex trading strategy.

The trader which is either home-based or office-based or retail investor can possibly trade on real time with different banks with an aid of a broker. The broker then uses the computerized platforms of trading. It contains traders on live desks which places the trades on the broker’s books or on real investors. However, when the trade was placed in the broker’s book, 95% of the money will be lost by the traders. So the brokers take this is an advantage on them.

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