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Mythology Of Fibonacci Part 1

I did not use any statistics, but for certain I won’t be mistaken, having told that market research on the basis of fibo-levels is one of the most widespread kinds of the analysis among traders-beginners. However, not only beginners. Professionals too sometimes use it, — however they see in fibo levels absolutely other sense, rather than beginners. The same it is possible to tell about beams Hannah, and settlement levels of support/resistance … But about all one after another.

It is pleasant to beginners, as it is successful fibo-levels or beams predict the future important reference points in behavior of the price. Here the rate has very precisely beaten off from fibo, only a few its punctures having reached it level; here the beam Hannah for the whole three days became almost ideal trend line; here the price was developed in accuracy at other beam. Forums and blogs dazzle with the pictures showing prophetical possibilities of similar techniques. And at a sight at these pictures there is nothing to object, apparently: and after all indeed works! Certainly, sometimes works, sometimes it is not working, — but as a whole it is fine reference points, a reliable basis of technical market research.

Why levels of Fibonacci work? In this respect there is a whole theoretical base, and arguments are made not up, and sound quite scientifically. First, “a gold proportion” is an unbiased fact, the nature law, and the market too partly is the natural phenomenon. Secondly, the market searches for the optimum price, i.e. the balance sheet between supply and demand, optimum method, namely on numbers of Fibonacci — with this is hard to argue, it is mathematics. Thirdly, numbers of Fibonacci are pledged and in mentality of the person: for example, slipped on ice will instinctively search for a balance point in such a manner that its body will fluctuate on fibo-proportions; well and in the market psychological pressure increases during those moments when the price comes nearer to this or that fibo level. And, at last, a principle of “a self-justifying prophecy”: levels supposedly therefore work that is why many use them.

But the trader, first of all, should be the realist and to be able to see not that it would be desirable, but what is actually. It is very difficult not to be taken prisoner to own imaginations; and to separate, where the reality comes to an end and the imagination and it is also not a simple task. But, fortunately, cases with fibo, beams Hannah and settlement levels constitute an exception. Here all is easily checked in experimental way. Let us consider it in the following articles.

In case you decided to participate in forex trading should start from learning the basics of this market to make sure you do not have problems with this industry.

There is another option – you can hire experienced traders to managed your trading account – read more about forex investment here. Also make sure to search for the knowledge in a good forex book.

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