This article is part of our guide on how to use scalping techniques to trade forex. Scalping a how trending market is very different from scalping a quiet, tame market where price action is confined in fibonacci small range and is going nowhere. In a ranging market scalpers will buy or sell, and wait until the price comes back to where it left, and keep gathering small profits until the prevailing range pattern is eliminated. When trading a trending market, however, we must be careful to ensure that our orders follow the established trend. High volatility requires a strict approach to realizing both losses and profits. A scalper who is trading in a tame, range-bound market can be a bit more relaxed and arbitrary about use risk controls they must still be applied with discipline, but not in the robotic manner which must be applied in trending marketsbecause the market is not expected to make sharp movements due to fewer market participants and a smaller amount of liquidity not to mention that there is no news catalyst for strong price movements. But a trend scalper must deal with such conditions at all times. Scalping in trends can be difficult, because of the size of the sudden fluctuations, and the lack of clarity at least in the short term with respect to the eventual destination of the price. The Fibonacci extension levels are very useful in analyzing trends in all forex, and scalping is levels exception to the rule. Our aim in using this indicator is identifying levels where forex price may rebound. In the 5-minute chart of the USDCHF pair, we have identified a sudden and sharp movement beginning at around 4 am on 23rd July, and decided to draw forex extension after the first red bar where its momentum is temporarily checked. Upon drawing the extension in the indicated area, we notice the levels Careful examination of the chart above shows us not only that the price rebounded several times at the extension levels of the indicator, but also that these levels served as strong attractors pulling the price towards themselves. And the other two levels similarly created performance fibonacci for how trend which, once broken, created further momentum for the trend. Trading against a trend is dangerous, and the risk of sudden reversals is no less dangerous for scalpers. As such how need a tool which will help us identify the general direction of the trend, so that even if we suffer some losses, eventually our gains will justify our trading activity. The Fibonacci extension level is a great tool for this purpose since it allows us to guess with a reasonable degree of accuracy the main momentum of the price action. But as long as the trend is intact our strategy would involve scalping between the extension levels to accumulate profits. Trading Foreign Exchange on margin carries a high level of risk use may not be suitable for all investors. The possibility exists that you levels lose more than your initial deposit. The high use of leverage can work against you as well as for you. OptiLab Partners AB Fatburs Brunnsgata 31 28 Stockholm Sweden Email: You are using an outdated browser. Please fibonacci your browser to improve your experience. World's best forex deals and strategy.
The SECRET to Using the Fibonacci Extension Tool
The SECRET to Using the Fibonacci Extension Tool
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