2Bull Forex Blog

You might not have heard of Leonardo Fibonacci. He was a well known mathematician who lived in Italy between 1175 and 1250. He’s responsible for a number of significant contributions to mathematics as we know it, including the introduction of the decimal system to Europe. He also studied a particular sequence of numbers, now known as the Fibonacci Sequence.

This sequence starts with zero and one. Each new number is the sum of the two numbers that have gone before. That means that the second number is one. Since one and zero added together equal one, this is the third number. The first numbers in the Fibonacci sequence are zero, one, one, two, three, five, eight, thirteen, twenty-one, thirty-four, fifty-five, eight-nine, a hundred and forty-four, etc. The sequence theoretically continues into infinity.

The interesting thing about the numbers in this sequence is how frequently they turn up in the world around us.

They even show up in Forex trading. Ratios found in the Fibonacci sequence can be seen in currency price moments. They also appear in the price movements of stocks and other types of investment. The big three numbers you should pay attention to in Forex trading are 0.382, 0.5, and 0.618.

There are plenty of other numbers, but these are the most important. That’s because they’re used to calculate what are called retracement levels. These are used by a lot of traders to decide when they should place their buy and sell orders. This works as follows:

If you assume that the price of a pair of currencies, or even of a company’s stock is trending upward, you’ll also need to assume that prices will hit a peak. They’ll then go into a temporary reversal, and resume the trend after a little while.

This reversal is where Fibonacci numbers come in handy. That’s because the price of currencies that are trending can be expected to reverse back into a Fibonacci number, then bounce back, contining the trend. A correct forecast can allow you to buy in just before the upward trend starts up again. You could make a bit profit this way.

Use an online trading platform that can chart these numbers for you. Draw a line from a particular low point to a high point, and the retracement levels should be mapped automatically on a chart. Of course, it’s not as simple as just trading when the price is the same as a Fibonacci number.

There are plenty of other things to remember. For one thing, you don’t know what level the price will stop at. Choosing .382 when it could drop to .618 will cause you to lose a lot. Also, it’s important to choose the right low and high points to make sure the retracement levels are correct.

Also, even though they can be incredibly accurate at times, Fibonacci numbers don’t always work a hundred percent of the time. There are two many variables at work in the Forex market. You can’t rely on just one method to find out what the prices are going to do.

There are lots of forex trading courses sold online but how do you get one that can help you design and implement a successful forex trading strategy? Here we will look at some key points to consider.

When choosing a forex trading course there is one thing you shouldn’t really pay for that’s “the basics” and by this I mean:

How to buy and sell currencies, an introduction to technical analysis, chart patterns explained etc. You can get all this online for free and don’t have to pay for it so don’t.

What you are really interested in is a forex trading strategy which will give you an edge in your trading. By this I mean the exact edge it gives you in putting you in the 5% of winners and avoiding the vast majority of losers.

A trading edge is essential to win at forex trading and this is what you are after from a forex trading course.

You are looking for indicators combined which can give you an edge.

A good question after you have read about the course is to write to the vendor and ask him - “what his forex trading course gives you in terms of edge”?

The way he replies and the speed he replies, will give a good indication of the service you can expect.

Live Training & Newsletters

Many forex trading courses will illustrate what they teach live in daily newsletters blogs or forums so you can see how the forex trading system performs real time and learn about its strengths and weaknesses

Look for email support

It should be unlimited support and allow you to ask any questions you want and included in the price. As a newbie you are bound to have questions and queries so look out for this.

Beware though, many courses are little more than a manual of basics and as there simply sold by marketing companies there is never any support because there not qualified to give it.

Ask a few questions before you buy, just to make sure your happy with the response.

100% Money Back Guarantee

Always look for this. You don’t know what forex trading education you are going to get you are just taking the vendors word for it so get a guarantee. Make sure its straight money back guarantee no questions asked.

A Trading Course Has to Deliver This!

There are many good forex trading courses out there and keep in mind you after ones that offer strategies for forex trading success that give you a trading edge.

If you find the right forex trading course they can cut your learning curve considerably in terms of developing a forex trading strategy for success.

Interaction between people on the net is bigger than ever and there are many discussion forums on forex trading where traders can share their wisdom with others and here we will look at them in more detail…

If you want good forex advice don’t bother with forums! We will look at how to get better advice in a moment but why are forex trading forums of little use?

First of all they are normally populated by vendors who are simply trying to sell their forex trading strategies and most of these are of little use and of dubious quality.

The other main group are the ego traders - they cant actually make any money themselves (if they did they wouldn’t hang around forums) and it makes them feel important and better about themselves i.e it strokes their egos.

I have been a trader for 5 years and never go near a forum and most of the traders I know who make money with their forex trading strategies don’t either.

A forum sounds a great idea in theory but in practice you don’t get much information that’s worthwhile and they wont help your forex education.

So if you cant get good information in currency trading forums where can you get it?

If you look on the net you can learn all the basics of buying selling and background to such areas as forex charts for free and if you put in the searches you will find all the information you need - the hard part of course is deciding a forex trading strategy which can help you obtain better marketing timing for your trading signal and this is down to you.

You need to get the basics together and then build a robust simple forex trading system. You can get all the information you need free online.

If you want to trade successfully look up trading breakouts - this is a simple way to make money which involves buying and selling new market lows or highs. Most big trends start from these so going with breakouts is an excellent methodology.

You then need to confirm the trade and check momentum is on your side. For this look up momentum oscillators (we have also covered them in our other articles) and get a few to confirm your trading signal - You now have the basics of a system that will work.

If you want to trade successfully, you will find everything you need for your forex trading strategy online and don’t go with the losers and visit discussion forums on forex trading, you will learn little of use - other sources are better.