Fibonacci Retracement is a leading indicator that is used to predict future price movement of a currency pair. This indicator can be used in different trading markets

such as stocks, ETFs, futures and forex. Well what is Fibonacci and how does it work?

Fibonacci Retracement was discovered by Leonardo Fibonacci in the 12th century. Leonardo realized a proportion in the building blocks of nature. The Golden rule, as it’s called, is the proportion of things in the larger picture. Fibonacci Retracement says out of a larger movement the price will retrace a certain percentage of that larger move before continuing in the original direction. The mean for those percentages is 61.8%. This number is the Golden Rule.

The proportion Leonardo figured out was that 61.8% of the distance between your head and your feet is your belly button. Your elbow rests at the 61% proportion of your total arm distance. In a beehive the bees consist of 61% males to females. The list goes on and on. How can we use this to trade? We can use it in trading markets because these same proportions exist there as well.