The simple trading strategies are varied. One of them is by applying the Fibonacci pattern. That is maybe a new term for you, especially if you are a beginner in this forex industry. 

It is so important to learn about Fibonacci and every terms which are related to it. The reason is because those things will be always there and attach to your forex pair chart. 

As time goes by, several patterns are then developed. Many people said that it just like a magic indicator to help someone predicts the price movement. Do you want to know about that？

The good thing is that various simple trading strategies are also related to the pattern. Here is the further explanation which can be beneficial for you. 

The Basic Definition of Fibonacci Retracement and Extension

Generally, a trader will use the Fibonacci line to know a Retracement of current trend. It is because the price movement in the market is dynamically bounced or retraced in those lines. 

These lines represent certain price levels which are always checked by the traders before they open or close a position. In the other words, a running trend (uptrend or downtrend).

However, those trend have an expiration date where price could be bigger after its experience a reversal. Usually, that is after it passes through the lined from a stage to another one. 

Simple Trading Strategies by Using that Pattern

After knowing about the description, it is the time to know the popular pattern that it has although the application. Usually, that is used as an plan of reversal trading. 

This is called the AB = CD. In a common case, there will be some formations and one of them may have the best signal. The form could be looked like a zigzag zag shape, but make sure to know one thing.

These lines are made based on certain rules. Ideally, this AB = CD formation is more focused on the similarities of their leg length and period of price movement between AB and CD.

However, mostly it is hard to find this formation because forex market is easy to change and really dynamic. That is why; this ideal reversal signal is quite rare. 

OPEN and EXIT with fibonacci 

Sometimes maybe a trader is prefer to choose the best signal. If You did that too, the best simple trading strategies are available too. Generally, that formation is withing a reversal bullish zone. 

That is when price Becomes bullish after the market is in a downtrend condition. Place an instant order or pending buy limit some pips from the lowest low tip area. 

Take profit/TP can be installed consequently from the 0.23 – 0.78 Retracement Fibonacci point. The assumption is you could divide the lot in those points to reduce the risks of reversal before a final TP. 

From a stop loss side, a trader can place the SL depends on his risk management plan. It is better to choose a SL which has the ration of at least 1:2 or 50% from the Final TP. 

There are More Variations to Know

Those are the two simple trading strategies if you want to use a Fibonacci patten. In fact, there are some more patterns which the traders must understand. What are those？ 

The examples are like butterfly, Gartley, Crab, and many more again. Some analysts said that these are more accurate to use, but in the other side are more complex too. 

If you want to learn by doing, join the best forex broker will be great. They have the quick access with various important features that will be helpful. 

Salmamarket forex broker is a recommendation since it has been in this industry since 2014. Salmamarket is also supported by many professional staffs. 

That is why; you must join Salmamarket to experience the best trading ever. Join for free from the official website and you are ready to run these simple trading strategies.