Traders who are serious with their business use Fibonacci as a tool that can help them in attaining more chances at profit than losing money.
Although they do not win 100% most of the time, at least they are able to lessen the risks that they are taking.
They win more often than lose in their trading activities as they are able to predict where the profit points may take place.
Traders are also able to pinpoint the level where they can possible enter a market with high rate of probability.
It may be easy to compute for the numbers that come in the series when using Fibonacci.
However, traders will have to know what numbers would give the possible retracements levels when making an analysis of the market.
Stocks for example may go back or retrace to a certain price level before it finally reverses to its usual price path.
It is also necessary that traders make use of the tool in conjunction with the market trends.
When they see that the trade is in their favor, they will have to decide whether they will stay put and take the risk for a possible pull back or they will have to take their profits at the present price before it hits the next pivot level.
Traders will have to sell at one level or another in order for them to gain.
However, they can stay in the trend if they see that they are in a very strong bull market.
Experienced traders hit the higher highs that are set up through the Fibonacci levels.
In cases when this does not happen, they can decide to get out of the trade.
It may be a little difficult for new traders to really grasp the idea behind the use of this tool.
Those who are able to understand it may have at least 70% chance of predicting the market behavior over a given period to time.
Traders look at their charts to help them in making trade decisions.
The charts provide them with a more solid basis for their trading moves.
The Fibonacci technique helps them to dispel uncertainties about the trend that the market is taking over a specific time frame.
If there are a great number of traders using the golden ratio, then this would have an influence over the market trends because of the consequent effect.
To get the best results out of the trading activities, traders will have to combine several techniques that will allow them to get a more concrete view of the real trends in the market.