prices sometimes are pronounced, but not infinite, i.e. at some point prices corrected and this is due to several factors. If we speak of speculative investors, a good level of benefits satisfies them and they decide to leave the market to make it liquid obtained utility. If these movements are important they will do that price correct, regardless if the trend is bull or bassist.Another factor is the psychological element, which provides a common sense or common sense. When a value or price of any currency traded at levels outside of the common, many investors prefer leaving the market to see what happens and not take any chances.Whatever it causes, prices do not move in a straight line, i.e. we can observe trends within trends. A secondary trend can co-exist within a primary.
Suppose the primary trend is bullish. Within it we find movements bearish or zig-zag that generate what is called secondary trends. Within these trends many operators make their investments at the intra-day and are excellent opportunities to obtain benefits and a widely used tool is the application of Fibonacci ratios, which often determine supports and resistances. Fibonacci lines are very similar to the speed lines. To draw them we only have to select two significant points in the group, for example, from the start of upward until the first stop, with a small start to fall.
From this second point draw the projection up to the height of the first point and divide this distance in two special lines: following the proportions in line 62% and 38% line.Another application are the areas at the time, that consists of vertical lines in periods corresponding to the series. I.e., placed vertical lines in periods of 5, 8, 13, 21, 34, 55, 89, etc. This line is to identify changes in the trends of the market.With Fibonacci arcs incorporates the variable time. It is not only identified areas of support and resistance, but when going to produce these. It is convenient to use together lines and Fibonacci arcs. Stronger signals occur when the two types of curves match. Since it is a very useful tool, the majority of trading platforms incorporates it as a tool, with which you must understand the principle. Then from the platform indicates the point of Fibonacci numbers that you want to know and potential correction levels will be shown to you.