Fibonacci Sequence: The Golden Key to Forex Trading 🔑

The Fibonacci trading indicator is all the rage in the forex market in 2025 🚀. It's truly amazing. This system uses the golden ratio of the Fibonacci sequence and seems to help traders see through the market.

What is the Fibonacci sequence 🧮

In simple terms, it's a string of numbers. Each number is the sum of the two preceding ones:

0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144...

Take a close look at these numbers. They are quite interesting.

• Each number is approximately 1.618 times the previous one.
• The number is almost 1.618, excluding the one in front.
• Divided by the one at the back, approximately 0.618
• Divide by the last two digits, close to 0.382

1.618, 0.618, and 0.382. These ratios seem quite magical ✨. They have become tools for predicting price turning points. There's a bit of a mystical feeling.

How to Actually Use Retracement Lines 📈

Fibonacci retracement can identify potential support and resistance levels. I'm not very sure about the principle, but the effect seems to be good. Commonly used levels are 23.6%, 38.2%, 50%, 61.8%, and 78.6%.

What can these lines do? 🔥

1. Find support and resistance levels
2. Better timing for entry
3. The stop-loss position is more scientific
4. The target price is clearer

For example, when a currency pair rises and then drops to the 61.8% line, many people will buy there. Why? It feels like a strong support point.

Fibonacci Extension: Where is the Target 🎯

Fibonacci extensions seem to be more popular in 2025. Main uses:

1. Set profit target
2. Predicting price rebound points
3. Find new support and resistance levels
4. Catch the market timing

Popular extension levels include 100%, 161.8%, 200%, 261.8%, and 423.6%. The numbers look a bit strange, but the market seems to be eating this trap.

Useful Trading Tips 💡

Smart traders use pullbacks to find entry points and extension lines to determine exit points. Data shows that combining it with other indicators is even more powerful 🌕. Moving averages or RSI combined with Fibonacci seem to really increase the win rate.

However, that being said, Fibonacci, no matter how powerful it is, is not万能. The market changes rapidly. Relying entirely on it? Risk management still needs to be done well.

Magical math, magical market.