Fibonacci trading is a technique employed by many brokers that does prove profitable to a large extent. It is preferred by a lot of professionals when they trade in the Forex market and is one of the reasons they are successful.
Fibonacci was a genius mathematician who developed a series of numbers which was later denoted as the Fibonacci series in his name. In the series any number follows the rule of being the sum of the past two numbers.
The Fibonacci pattern is prevalent in many natural as well as man made structures and is a subject of curiosity for people along the globe. Traders use Fibonacci ratios derived from these numbers when pursuing a trade like .236, .50 etc.
When the financial charts were carefully noticed it was figured that there is a resemblance to the Fibonacci sequence in the oscillations. They are not deadly accurate but do give a fair idea of the support and resistance levels of the given currency pair.
The proportions are calculated beforehand to aid the traders in making the decisions as the charts are found to be extremely volatile at those proportions. The trader gets an idea of when to enter or exit a trade which is all he requires to make profits.
There are selfish traders who make the analysis through the use of Fibonacci extremely complicated in an attempt to scare away other traders to use this method. It is true that the use of the sequence is not very easy but with practice it is quite possible for any trader to understand its working.
It would be nice for everyone to try trading with these signals and see if it works for them. It can be used in a combination with other signals to further assure success.