Monthly Archives: October 2015

Fibonacci Trading Strategy

What is Fibonacci Retracement?

Fibonacci retracement is a popular method in technical analysis that uses ratios to determine support and resistance levels. These ratios are derived from the Fibonacci sequence, which consists of key numbers identified by mathematician Leonardo Fibonacci. Fibonacci retracement is based on the idea that markets will retrace a portion of its original move in price before continuing its original trend. Whether they are trading stocks, commodities or even day trading the forex market, the Fibonacci retracements pattern can be useful to swing traders in identifying potential reversal levels and setting price targets and stop losses.

Popular Fibonacci Ratios

There are many different Fibonacci ratios that technical analysts use to determine retracement levels. However, the popular Fibonacci ratios are 0%, 23.6%, 38.2%, 50%, 61.8% and 100%. Technical analysts use Fibonacci ratios to identify retracement levels and predict the extent of a correction or pullback.

How do we come up with these ratios? First, it helps to have some knowledge on the Fibonacci Sequence. It is unnecessary to examine the mathematical properties behind the sequence but we will cover the basics as to how the ratios are derived. Continue reading

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Swing Trading Strategies

One of the main appeals of swing trading is being able to capture significant gains in less than a week, and without having it to be a full-time job. Of course, you must still work hard to find these short-term opportunities to take advantage of. It is helpful to understand some of the swing trading strategies that successful traders use and it is important that you have a set of your own trading strategies.

First, let’s briefly go over the definition of swing trading.

What is swing trading?

Swing trading is a short term trading method used for trading a variety of investments, such as stocks, bonds, commodities, options, and currencies. Unlike day trading where positions typically last only one day, swing trading positions usually range from two to five days, but can last as long as two or three weeks. Swing traders use technical analysis and disregard fundamental analysis. They aren’t interested in the intrinsic value of stocks, but rather they look for stocks with short-term momentum that can allow them to capture gains in just a few days.

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