Instant account opening
Site map
Български Čeština English Français Deutsch Italiano Polski Português Русский Slovenský Español Nederlands

InstaForex Client Area

  • Personal settings
  • Access to all InstaForex services
  • Detailed statistics and reports on trades
  • Full range of financial transactions
  • System of managing several accounts
  • Maximum data protection

InstaForex Partner Area

  • Full information on clients and commissions
  • Graphic statistics on accounts and clicks
  • Webmaster instruments
  • Ready-made web solutions and wide range of banners
  • High data protection level
  • Company's news, RSS feeds, and forex informers
Register account
cabinet icon

InstaForex – always at the forefront!Open a trading account and become a part of the InstaForex Loprais Team!

Success history of the team headed by Ales Loprais can become your success history! Trade confidently and head towards leadership like regular participant of Dakar Rally and winner of Silk Way Rally InstaForex Loprais Team does it!

Join in and win with InstaForex!

Instant account opening

Registration is not available for non-EU residents. Please, proceed to the website of the other member of the InstaForex group.
toolbar icon

Trading Platform

For mobile devices

For trading via browser

What are Fibonacci numbers?

Leonardo the Pisan is the first major mathematician of medieval Europe. He is best known by the name Fibonacci. The most famous achievement of Fibonacci is description of the sequence of numbers where each successive number is equal to the sum of the two preceding ones. As a result, the sequence 0, 1, 1, 2, 3, 5, 8, 21, 34, 55, 89, 144, 233, 377, 610... was introduced.

If we divide each successive number by the previous one, we get a result close to 1.618. This number was called the Golden ratio. Many people believe that 1.618 is a magic number. It was used for construction of the Egyptian pyramids, ancient temples and tombs. The Golden ratio and the Fibonacci numbers reflect proportions in the natural world, including human body.

Golden Ratio
Golden Ratio
Golden Ratio

If we divide any number of the sequence by the next number in the sequence, we get a ratio of 0.36. On the basis of correlation of the subsequent members to the previous ones, experts developed a unique series of numbers, which is very often used in currency and futures markets. Using these numbers, a trader can calculate price retracement in relation to the prior move or determine the ratio of the target to the previous correction.


Fibonacci numbers can be corrective and impulse

Corrective numbers:
11.8%; 23.6%; 38,2%;
50.0%; 61.8%; 76.4%; 88.2%;
Impulse numbers:
123.6%; 138.2%; 161.8%; 200.0%; 238.2%;
261.8%; 300.0%; 338.2%; 400.0%; 423.6%;
There is no need to know all Fibonacci numbers by heart.
All of them are already included in the software of trading platforms.

Market correction and Fibonacci numbers

Market correction and Fibonacci numbers

As a rule, after strong impulses, a price starts to move in the opposite direction. In trading this movement is called retracement or correction. If you correctly use the Fibonacci grid, then you can easily determine the retracement range and see when you can re-enter the market in the direction of the trend.

However, these retracements do not always exactly correspond to the Fibonacci numbers. For more accurate analysis, it is necessary to track candle patterns at the moment when the price reaches these levels. If the chart shows a reversal pattern, then the price is likely to rebound from this level.

Fibonacci numbers and new trend targets

The Fibonacci numbers are very helpful not only in determining correction levels. The Fibonacci grid allows traders to precisely determine new targets that the price can reach when a trend moves impulsively.

One of the generally accepted rules is that if the price correction was 38.2% or less, its target should be set at 261.8% or even 423.6% of the correction. If there is a strong correction on the market, then the target should be set at 161.8% of its value.

The Fibonacci numbers are one of the most powerful tools of technical analysis in the Forex market. The use of the Fibonacci numbers in combinations with analytical tools to determine the limits of corrections and targets are very helpful for trading on Forex.

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 62.89% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
You are now leaving www.instaforex.eu, a website operated by INSTANT TRADING EU LTD