Fibonacci Strategy for Beginners: What you need to know

We, at, understand how useful a great Forex Fibonacci strategy can be. A Fibonacci strategy is all about using the Fibonacci levels to enter a low risk trend. Using these Fibonacci retracements, you can anticipate that the trend will bounce up to high profit.

We’ll take a look at how you can use your Fibonacci technology on our Forex platform to make some profit.

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Variety of instruments for any strategy

At, our team focuses on providing a product to you that has plenty of variety. No matter what instrument you are interested in, we will ensure it is available on our site. From the volatile trades like Forex and crypto, to the more stable trades like bonds and commodities, we have it all on And, when it comes to Forex, we know a great Forex Fibonacci strategy needs a flexible instrument to go with it.

Your Forex trading strategies don’t need to adapt to our platform, because we provide everything you need. From the popular Forex trades, like EUR/USD, and USD/GBP, to less popular Forex trades, you can easily use your Forex Fibonacci trading across every currency imaginable.

World-class platforms

We at spent countless hours crafting and attaining the best trading software for you to use for your own gain. Our trading platforms, the MetaTrader 5 (MT5) and Capex WebTrader, will come in use in your Forex Fibonacci strategy. We have everything at the touch of a button – from trading signals to instruments, and to a chart that details everything you need to know about a trade.

Adding your Forex Fibonacci levels is simple- simply select the currencies instrument, choose your Forex trade, and then click onto indicators to get your Fibonacci retracements running. Once you have your Forex Fibonacci strategy up and running, our charts will make sure you minimise your risks and maximise your profits.

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A basic understanding on what a Fibonacci trading strategy can do

Fibonacci retracements, as a technical analysis tool, is so successful as an indicator due its roots: the Fibonacci sequence. The Fibonacci sequence is essentially the sum of two previous numbers, and the chain continues on infinitely.

So, the Fibonacci sequence starts as 0,0,1,1,2,3,5, and so on. Every number in this series is linked through ratios, and determines what we call ‘retracement levels’. These are essentially minor changes in the direction of a trend.

At CAPEX, you get access to our trading school, the CAPEX Academy, to learn everything about trading. Also, don’t forget to visit our guide on the best Forex trading tips.

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Opportunities and risks

Opportunities – The upside on using a Forex Fibonacci strategy regularly

  • Support and resistance levels: You’re not going to find more accurate and better readings of support and resistance levels than a Forex Fibonacci trading strategy. Similar to an Ichimoku trading strategy, looking at support and resistance levels will help you predict the next trend. The retracement levels are foolproof, as you are guaranteed a market shift when the trade hits one.
  • Versatility: Although primarily used as a Forex Fibonacci trading strategy, it can be used across many instruments, and at any time to yield results. The higher it stays on a timeframe, the more accurate the signals.
  • Mathematical analysis: Most other indicators rely on previous market trends. But, there’s actual maths and technical analysis to a Forex Fibonacci trading strategy. This means that in terms of market psychology, a great Forex Fibonacci trading strategy will always have a leg up. It relies on solid proof rather than historical data.

Risks – Downfalls on relying on a Forex Fibonacci trading strategy too much

  • Difficult to determine an entry point: Using a Forex Fibonacci trading strategy with retracements alone leads to some problems deciding when to enter a trade. A trend, particularly a Forex trend, is never flat, so having no discernable way to see a lowest point is a downfall without using other indicators
  • False signals: As can be a problem with many indicators, Forex Fibonacci levels can lead to some inaccurate cases. There have been times when a price has turned around suddenly without hitting a retracement level, or breaking through a level and continuing on.
  • Can’t be used with Expert Advisors: Expert Advisors (EAs) are automated algorithms that help you trade on the MetaTrader 5. A Forex Fibonacci trading strategy can’t be used with EAs, as using an automatic indicator into an already established indicator is impossible. EAs are useful in automatic trading, so this is a major downfall.

Resources available

We, at, pride ourselves on our ability to help traders. We have a great variety of resources available on our website for you to perfect your Forex Fibonacci trading strategy. Want to check out the latest news on what Forex currencies have hit a trend? Check out our market news page. Want to get a better idea of the subtleties of a Forex Fibonacci trading strategy? Head on over to our CAPEX Academy. We do the research for you, so you can focus on what’s important: your Forex Fibonacci trading strategy.

Why should I use Fibonacci retracements?

  • Great identifiers: Using a Fibonacci trading strategy gives you a leg up, because Fibonacci retracements are extremely useful in identifying many different aspects of the market. Support lines, resistance levels, placing stop losses and setting target prices has never been made easier.
  • Risk management: A Forex Fibonacci trading strategy is useful for minimising any risk you may undergo while Forex trading. As a Forex Fibonacci trading strategy is used as a forecast tool, it can make sure you enter a trade at the right point, leave when you have to and set up any fail safe stop losses.
  • Accuracy: A Fibonacci sequence has been used since the tenth century. Due to its reliability as a mathematical equation, it has come to be known as one of the most valuable technical analysis tools you can find in trading. A great Forex Fibonacci trading strategy is bound to give you the right information.


Ratios – What they do, why they’re important and how they’re used in a Forex Fibonacci trading strategy

There are three different ratios used to determine retracement levels for your Forex Fibonacci trading strategy.  The 61.8% ratio, the 38.2% ratio and the 23.6% ratio. Each of these ratios are critical in determining if a market is about to drop, or if a trend is about to change. The reason they’re called ‘retracements’ is because analysis usually shows that certain patterns and trends in a trade will repeat themselves.

These three ratios are usually used as predictors that a certain trend change will happen, for example, that Forex on will eventually drop and rise again.

  • The 61.8% ratio is determined by dividing one number in the series by the number that follows it. So, 5 divided by 8 equals 0.625.
  • The 38.2% ratio is determined by dividing one number in the series by a number two places to the right. So, you divide 8 by 21, and that would give you 0.38.
  • The 23.6% ratio is found by dividing one number in the series by a number three places to the right. So, you’d divide 13 by 55, and that would give you 0.236. The mathematical reasons are unclear, but these ratios play a huge role in indicating and forecasting when there will be a change in a trades price momentum.




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Step by step guide – how to use a Forex Fibonacci strategy to make a profit

1.  Pullback trade

A pullback is when there is a momentary lull or drop in a trades trend. This strategy works perfectly for a Forex Fibonacci trading strategy, as Forex Fibonacci levels are always halting or dropping. So, first of all, identify a strong Forex trend. This is a trend that has consistent highs, with a pullback rate of under 50%. After viewing the trade for a while, study how the trade moves around the 38.2% retracement level. Once it starts to drop off, enter the trade. All you have to do now is hold your position, and use the previous highs as an indicator as to when to leave the trade with maximised profit. Our platform is as smooth as can be, so as soon as you hit that level, and there’s a drop off, you’ll be able to enter automatically –  or, manually, if you value that control.

2.  Breakout trades

Breakout trades are when you enter a trade that is rapidly rising outside of support or resistance levels. These are highly risky trades to deal with, and have the highest failure rates out of all online trading strategies. But, with the right Forex Fibonacci levels and our reliable stop losses, this is a trade that can easily work for Fibonacci retracements. In order to get the most out of a breakout trade, we’d recommend you enter the trade at the very start of its volatility. Once there, Fibonacci extension levels are your friend. Use the addons to know when to clear the trade – when it has cleared 100% retracement – and once that is done, you just have to make sure it reaches the breakout level, and leave quickly. But, make sure it has not retracted more than 38.2% of the previous swing. This could lead to a disastrous loss.

3.  Trading with MACD (Moving Average Convergence Divergence)

A MACDs function is that it shows the relationship between two moving averages of a trade’s price. It works well with a Forex Fibonacci trading strategy, because an MACD can locate entry and exit points while the Fibonacci retracements locate the shifts in the trends position. When you match up a bullish MACD indicator with a Forex Fibonacci trading strategy on any Forex trade, the MACD will locate the best points to enter the trade right as certain Fibonacci retracements are just about to rise. Conversely, if you match up a bearish MACD indicator with a Forex Fibonacci trading strategy, the MACD will locate the best points to close a trade right when Fibonacci retracements are about to plummet. Ultimately, using other tools and indicators is smart, and we have plenty of indicators available on our trading platform. A MACD will align perfectly with your Forex Fibonacci trading strategy.

Conclusion – An accurate and reliable trading tool

All in all, a Forex Fibonacci trading strategy can definitely yield you some great results focusing on a volatile market like Forex. There is no indicator more accurate than determining when a price will suddenly shift trends, and implementing its system can be easy to do once you have an understanding of the Fibonacci sequence. You also have free reign to use other indicators with your Fibonacci retracements, as well as maximising profit by using it during breakout and pullback trades. It’s such a versatile instrument, that if you sign up to now and implement it, you’ll see profit.

Forex Fibonacci Strategy – FAQ

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