Hello, and welcome to another episode of technical analysis show for trading binary options. Today I will show you detailed examples of trading while using one of the most basic things – Fibonacci lines. We will learn how to draw the lines, how to use it to trade, but also a neat little trick. An indicator, which draws the line for us.
What are Fibonacci lines?
Fibonacci lines are a very popular tool, used by the majority of professional traders. These lines are based on the use of numbers identified by mathematician Leonardo Fibonacci. This series of numbers (0, 23.6, 38.2, 50, 61.8, 100) can be used in trading, because the price often makes reversals at these lines.
The lines are very easy to draw. See Figure 1
Just use the Fibonacci lines tool and connect those two said points. This gives us something similar to what we can see in the Figure 2
Now we can see that in the vicinity of the aforementioned lines, the price broke (see Figure 3) and (at least short-term) turnover has happened. I will tell you right now how can this be utilized.
How To Trade Binary Options Using The Fibonacci Line?
Check out the Figure 4 We have marked F.L. (Fibonacci lines) thanks to previous swing (orange points A and B) and now we can happily trade. Look at how many opportunities (marked by the blue circle) to trade were provided by the F.L.
The Best Fibonacci Lines
The best lines on which the turnover almost always occurs are the 0, 50 and the 100 lines.