A single Fibonacci level may be significant, but two Fibonacci retracements or extensions in confluence are a mighty combination…
The concept of Overlapping Fibonacci in forex trading is one that most traders come to after having used Fibonacci for some time.
Typically, they will be using Fibonacci retracements or extensions looking for a confluence of a Fibonacci level with other signals such as support and resistance, pivots etc. The idea of overlapping Fibonacci is likely to be an exciting discovery. Why?
Because very often that is all you need in order to trade: two strong Fibonacci levels at an area of known support and resistance for example, will very likely yield some kind of usable reaction. Many traders find the simplicity of this strategy appealing, and use nothing else in their trading.
As usual, giving chart examples will probably be the best way to illustrate the concept.
Take any chart with a reasonable run up or down in price, combined with several moderate retracements along the way, and just start drawing Fibonacci on that chart:
The concept of Overlapping Fibonacci in forex trading is one that most traders come to after having used Fibonacci for some time.
Typically, they will be using Fibonacci retracements or extensions looking for a confluence of a Fibonacci level with other signals such as support and resistance, pivots etc. The idea of overlapping Fibonacci is likely to be an exciting discovery. Why?
Because very often that is all you need in order to trade: two strong Fibonacci levels at an area of known support and resistance for example, will very likely yield some kind of usable reaction. Many traders find the simplicity of this strategy appealing, and use nothing else in their trading.
As usual, giving chart examples will probably be the best way to illustrate the concept.
Take any chart with a reasonable run up or down in price, combined with several moderate retracements along the way, and just start drawing Fibonacci on that chart: