Posts Tagged ‘stock market’
Technical Analysis – Fibonacci Retracement Trading
Sunday, January 17th, 2010Fibonacci, Actually named Leonardo of Pisa, was born in Pisa, Italy about 1175 A.D.. Today, he is recognized as the greatest European mathematian of the middle ages. Fibonacci is credited with introducing the Arabic-Hindu numeral system to Europe. He also introduced the decimal system. Both became the basis of mathematics we use today. Enough background for now.
Although Fibonacci covered an entire realm of mathematics, the main numbers used in trading are actually percentages. The percentages are 38.2%, 50%, and 61.8%. These areas are viewed as trend retracement points. The most commonly held theory is that a 38.2% retracement of a trend is a failed reversal and the overall trend should continue. A retracement to the 61.8% mark signals that the retracement is the beginning of a new trend. The 50% level is used for different strategies if confirmed by several other signals
The use of Fibonacci numbers in trading has become increasingly popular in recent years. It does not take long when looking at charts to see several examples of Fibonacci tracements. On numerous occassions I have watched analysts making market predictions on T.V. shows. I will often check the charts about what they discussed. Some of the predictions for new price levels are dead on Fib. retracement numbers.
Fibonacci numbers, as with all technical indicators should not be used by themselves. They should be combined with other indicators to make a complete system to trade with. I do believe that Fibonacci numbers should be a part every traders list of indicators. They do seem to be extremely accurate, This could possibly a self fulfilling prophecy. If enough people believe it, they will cause it to hold true.
In any case, if you do not currently use them, you may want to look into it.
Forex, Will This Trend Continue, How Low Can It Go?
Friday, September 4th, 2009We have seen officials declaring the recession is ended, and yet only a few hours later a piece of data comes out that contradicts that idea. And we have seen the Dollar getting bounced around.
September in the stock market is normally the worst month, about an average of 3% loss are recorded each year since 1929. While October is the “crash month” (last year alone the market fell 13% in October) the downfalls are few and far between – so September is the hard month. (more…)
The USD Benefits as Wall Street Slides
Wednesday, September 2nd, 2009The US Dollar firmed on Tuesday as share prices fell, prompting investors to shed perceived riskier currencies. In spite of better than anticipated numbers from the Institute for Supply Management, shares on Wall Street showed only muted enthusiasm to the data and quickly lost ground, lifting the U.S Dollar, which has tended to be used as a safe haven versus losses in equities. Ahead of the U.S. jobs data later today, traders said players were anxious about any negative surprises. As the market has become less sensitive to positive surprises from the U.S economic data, the effect of any weak figures would be bigger than the effect of any positive numbers.
USD – Dollar Boosts on Optimistic Manufacturing Data
The Greenback arose versus most of its major currency pairs yesterday as sharp losses in global stock markets offset stronger-than-expected U.S. manufacturing data and boosted the greenback’s safe-haven appeal. As a result, the USD finished yesterday trading session 150 pips higher against the EUR at the1.4216 level. The greenback also saw bullishness against the GBP and closed at 1.6155. (more…)
