Fibonacci trading is a very popular technique that can be used to identify potential support and resistance levels in the market. This technique is based on the mathematical sequence developed by Leonardo Fibonacci in the thirteenth century. This sequence is formed by adding the previous two numbers in the sequence together. The most popular Fibonacci ratios used in trading are 0.382, 0.5, 0.618 and 1.618.

To use Fibonacci to trade the market, you need to identify a trending market. Once you have identified a trending market, you can then use Fibonacci to help you determine where to place your stop loss and target levels.

First, you need to identify the high and low points of the trend. Once you have identified these points, you can then use a Fibonacci tool to plot them on your chart. The Fibonacci tool will automatically calculate the Fibonacci ratios for you.

Next, you need to identify the current trend. To do this, you can use trend indicators such as the moving average or MACD. Once you have identified the trend, you can then use the Fibonacci tool to plot the current trend on your chart.