One tool that many traders and a majority of investors do not include in their investment or trading decisions is Fibonacci analysis. From a trading perspective, there are many basic and advanced ways that Fibonacci numbers can be beneficial to the trader. Suffice it to say that this series of numbers and the relationship of one number to another in the series have been found throughout nature. The most notable relationship can be found by dividing one Fibonacci number by the next one in the series, which will give you the “Golden Ratio” of 0.618.

There are two primary ways to use Fibonacci analysis in trading. One is to identify or confirm support or resistance levels, and the other is to help identify price targets. Often times, a trader will look at a market and realize that when they were not paying attention, a significant level of support or resistance was broken and the market has already moved significantly. Fibonacci analysis can be very helpful in this situation.

Be aware trading carries risk and not all strategies or rules work the same every time or have the same results for each trader. You should always understand your risks

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