1. Introduction:

Fibonacci was one of the most important scientists of Italy in mathematics made a theory that the basis of any rise must be followed by a temporary decline before continuing to rise again and recently traders began to benefit from this theory in predicting the movement of currencies and measure this theory the extent to which the decline of the process and the most important levels seen by Traders are 38.2 and 50.0 and 61.8 of the main movement which is in the general direction of the currency.

2. Applying Fibonacci Theory to Currency Trading:


Fibonacci lines are strong lines to identify support and resistance points, and the idea of these lines is short: that after forming a bullish or bearish trend, the price must return to correct (ie opposite direction). Here comes the role of these lines to determine the extent to which the correction will occur, and whether this correction will reach the degree of reversal of the trend from the rise to the fall or from the descent to the rise.

Fibonacci lines are therefore the support and resistance points in this correction. The trend here may differ from a strong long-term trend on Weekly or Daily, for example, or it may be just a top and bottom on the hourly, for example, but the larger the trend the stronger the lines' impact and credibility.

As for the way they are drawn, they are drawn according to the direction. In the case of the upward direction, the drawing starts from the bottom to the top, and the zero point is therefore at the top and the 100th point at the bottom. In the bearish direction, the graph starts from top to bottom, and the zero point is at the bottom and the 100th point at the top. It can be drawn on different tires, on different peaks and bottoms, meaning that on one graph and one frame one can draw more than one Fibonacci pattern on different peaks and bottoms. However, the larger the frame (weekly or daily), the stronger the lines. The distance between the top and bottom is greater (the larger the trend) the stronger the lines. It is stipulated in the drawing that the direction on which you want to paint is not broken. Some know that the trend is broken by breaking the Fibonacci 61.8 .

There are other Fibonacci lines such as fans, time periods and arcs, but this method is the months most used is the so-called retracement.

3. Examples:

The first chart is an example of drawing lines on a bullish trend in the daily range, and the second chart is like a bearish trend in the daily range as well.

- The first example:


- The second example:

And a very important point is that it is necessary to correct the Fibonacci fee that the price has not exceeded the point of 100%, which made me say that is noted from the first graph that I have attached it exceeded the price 100 and in the second graph is required not to exceed the zero line also.

To further clarify, When a pair moves in a certain direction for a continuous period, for example, 200 points, to reach its resistance points stops. And it begins to recoil. This rebound is not called fractional unless it reaches a long stage and is broken Fibonacci 61.8 until this moment is called a correction only.

The importance of Fibonacci lines is to know this correction to how long it will continue, 40 pips for example or 80 pips or continues Up to 200 points. In order to reach this result, the Fibonacci lines should be applied on the chart until we obtain these expected price values during the correction as it can correct the first line 23.6 then continue the upside trend. Or continue to fall to the second line, and so on. In the event that the price has reached the 61.8 Fibonacci line and descended below it, some consider that the trend has been breached or broken, that is, a shift from bullish to bearish, while others require that the price reaches the point 100% is the starting point and then breaks it which is considered to be the trend has broken.

4. Some important notes about using Fibonacci:

The best and most accurate use to draw Fibonacci lines is on the graph of a four-hour, and does not prevent their use with any other graph. But the four-hour range is the best at all, and gives honest results by a very large percentage, especially for speculators rather than investors. Its use in the daily range is to know (the distant trend) and the limits of support and resistance, and to compare the direction and strength, etc.

Use these lines to see the correction to the upward trend and got a decline, so that the speculator knows the end of the correction, to enter into this stock or currency pair, and vice versa also.

The strength of these lines starts at 38.2, followed by the strongest at 50 and the strongest (at all) at 61.8 The level of 76.4 is used instead of 61.8 in pairs whose movement is fast and violent Like the Pound-Yen, Pound franc, Pound dollar, and other fast pairs, especially if it is breached from the first time.

If there is respect and strength for the level of 23.6 it is well known that the level of 38.2 will break from the first or second attempt, and if there is a rapid break to the level of 23.6 and at the first attempt, the level of 38.2 will stand for a while, because These are the first stages of correction, and they have these things because buyers and sellers have not yet decided whether a real correction will occur or is it just a simple correction, and this is often at 61.8 and 76.4 levels.

It is very important to know that starting with these lines (and relying on them) is when the price reaches the correction level 23.6

The most beautiful of these lines, is to enable you to trade regardless of any direction (or model, or averages) and this entry buy or sell when approaching the price of the levels of Fibonacci mentioned by up to 30 points, especially the strongest ones. When one of them is broken, the process is reversed after the bar is closed outside these 20 numbers, and then re-tested.

5. Super Cluster :

One of the most powerful and Fibonacci levels is a violent resistance point or a strong support point, and is usually used to merge between Fibonacci Expansion and Fibonacci Retracement.

The simplest forms of super cluster are merged between a level of 38.2 and 61.8 for another Fibonacci line. We use it to enter trades because it sets very strong support and resistance levels.

- Buy signal: entry is at the Claster area of Fibonacci levels with attention to price behavior. After entering the stop loss under the behavior of the price meaning above the top of the candle and the target is double stop loss.


- Sell signal: entry is at the Claster area of Fibonacci levels with attention to price behavior. After entering the stop loss above the behavior of the price meaning above the top of the candle and the target is double stop loss.
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