The scheme of trading binary options using Fibonacci levels

Ted Capwell Updated:

Being a beginner in trading binary options, you probably already reviewed many strategies for trading binary options. All effective strategies are based on trade in the direction of the so-called trend. It is necessary to make a deal precisely when the price is reversed. This phenomenon in the world of trading is still called correction. When the time comes for the correction of prices for the selected trade asset, prices begin, as a rule, to unfold. To determine the depth of the correction of the value of the asset we need, we will use the Fibonacci grid.

Binary options trading schemes, that will minimize your financial risks

The Fibonacci grid is nothing else but a tool for technical analysis.

Fibonacci grid

As we said earlier, the Fibonacci grid is an analysis tool that is based on the patterns of Fibonacci numbers. As this regularity looks, every number that follows the previous one is equal to the sum of the two previous numbers. For an example, it’s better to look at a series of numbers constructed using this pattern (1, 1, 2, 3, 5, 8, and so on).

The construction of such a series will allow us to determine the depth of the correction of quotations of assets of interest to us. Using this series of numbers, you can also determine the size of the future wave of price movement.

How this strategy works

As a rule, every modern binary options broker is trying to provide a large selection of analysis tools for successful trading. The instrument that interests us most often is in the section of graphical analysis tools. It is called the Fibonacci Grid.

Model the situation. Movement of quotations a certain period of time moved upwards. As you understand yourself, making a deal to raise in this case will not be the most correct decision. There is an opinion that it is possible with a high probability to turn the quotations in another direction.

The optimal level of the conclusion of the transaction is the price increase due to the corrective movement. After the turn, quotes should continue their movement towards the trend.

Defining this level

To do this, we need to apply the Fibonacci Grid to the quotation schedule. Next, we determine the trend we need. Based on the growing trend, we will need to place the “0” level, that is, this will be our foundation. Accordingly, the “100” level will be our top.

Now we need to place these indicators in the appropriate places on the quotation chart. Now it will be in order to examine the typical levels between which the correction will occur.

– Between 50% and 62% for growing trends

– No more than 62% for downward trends

Having reached these levels, quotes have the property to turn in another direction and will continue their movement towards the trend.