The Fibonacci retracements tool in the foreign exchange trading is one of the very few legal ways that exist to become wealthy in a short amount of time. Trading foreign exchange as a profession (and hobby) received a spurt way back in 2002, as a result of a sharp drop in the value of the dollar. And the craze has remained the same to this day. Instead of reducing with time and age, the fascination with stock markets has only got stronger. Quite a lot of people are found to compare currency trading (or even stock and commodity trading for that matter) with gambling, since there is virtually zero predictability in this whole thing.
All the forex traders trade via the innumerable online forex trading platforms that are available on almost all the major brokerage sites. Examples of this include Metatrader 5, cTrader, ActTrader etc. In order to trade online, traders normally use demo accounts, graphs, price movement charts, different kinds of indicators and various tools in order to determine the best move that can be possible. This is needed so that people can figure out the best conditions to execute a trade, and act accordingly. That is, place the orders in accordance to the findings. Now, any reader going through this article would want to know: what are these ‘tools’ that are mentioned; and how do these work? For answers, read below:
Fibonacci Retracement Lines: This is one of the most famous forex trading tools which are available out there. With the help of a Fibonacci retracement plotter, a trader is able to know the projection and retracement levels at all the points of the trade (including the start point and end point). The Fibonacci Retracements tools are extremely important, since they assist traders to correctly set their targets for the ‘take profit’ and ‘stop loss’ points.
Pivot Point Calculator: This pivot point calculator provides help in calculating the resistance and support levels of the currency pairs being traded. One can simultaneously calculate the rates pertaining to about four (or more) pairs of currencies. All calculation is finished when the user types in the low, high and close values of the currency pairs in question; and the tools brings forth the anticipated results which display the support, middle, pivot and resistance points of the different currencies. And after paying careful attention you may notice that many pivot points occur around Fibonacci points.
The Rate History Tool: The rate history tool makes it possible for the traders to see the exchange rate history of a specific currency pair. With the help of this (and the Fibonacci Retracements tools) a trader can go back in history until up to a year or 365 days. As a result, the traders can identify trends and common universal tendencies during particular times of the year.
Carry Trade Calculator: This tool is used to calculate the interest rates that are to be paid or received by the trader. The factors taken into consideration by this tool are the duration of the trade and the size of the trader’s position. This tool is vital since it allows a trader to calculate and compare the rates of appreciation and depreciation in two different currency pairs.
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