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The Fibonacci retracement tool can be successfully implemented in your daily trading if you know how to use it. I would recommend practicing this strategy at a reliable broker which offers short term trading options. Learn Fibonacci basics and how to draw Fib lines. The name comes from the famous Italian mathematician Leonardo Fibonacci who developed a sequence: The Fibonacci retracement is calculated by dividing the higher numbers in the sequence: In trading the Fibonacci retracement is simply a drawing tool which separates the chart in the following levels: The idea is to locate a trend on the chart up or down and pullback retracement after which the trend will continue in the same direction.

You have to enter the market at the pullback with a Call or a Put option depending on the trend Up or Down. You need to draw the Fibonacci lines in the direction of the move in order to locate the retracement — the point where you trade.

In an uptrend you draw the Fib lines form the Lowest to Highest point of the trend and the opposite way for a downtrend. When you are using the Fib tool your aim is to define at which level the price action will stall. Ideally the retracements will start on the There is a small pullback on the The price move dropped first to the You can see on the chart there are two pullbacks on the I took the second one as a confirmation for a retracement after which the trend made a strong move to the downside.

In such a case when you have a confirmation you can continue buying Put options on the pair. These are the basics of Fibonacci retracements so you can expect more articles to come on this subject. I hope this strategy will be useful for your binary trades and should you have any questions feel free to contact me in our forum.

Skip to main content. Fibonacci Strategy for short term trading Basics You are here Home. Fibonacci Basics The name comes from the famous Italian mathematician Leonardo Fibonacci who developed a sequence: The key level to be monitored on your chart is Essence of the strategy The idea is to locate a trend on the chart up or down and pullback retracement after which the trend will continue in the same direction.

To be successful on this strategy - Trade highly volatile markets such as Forex - Get some experience with the Fib tool so that you are able to find the