What Is the Fibonacci Golden Zone and How Traders Use It?
Do you know how the Fibonacci Golden Zone Indicator works? The indicator mentioned above works by attaching it to any currency pair as well as any time frame chart that you wish for it to plot the Fibonacci levels for you.
It is worth noting that the Fibonacci Golden Zone Indicator is suitable for inexperienced and experienced traders.
Interestingly, professional traders and word-famous banks use the Fibonacci Golden Zone Indicator in order to examine price reversal as well as retracement zones. As you can see, professional traders understand the importance of the Fibonacci Golden Zone Indicator.
Is it hard to use the Fibonacci Golden Zone Indicator?
Thanks to the Fibonacci Golden Zone Indicator, it is possible to save time. It is worth noting that you will no longer need to draw and delete Fibonacci lines on your charts manually.
The Fibonacci indicator is included in MT4. However, the Fibonacci indicator will not automatically plot the Fibonacci levels for you, which is where the above-mentioned indicator comes into play.
You have to open a trading account with a forex broker in order to use the TradeMiner software.
In the case of the forex market, the Fibonacci trading strategy keeps track of trends in currency pairs. When a forex pair is trending in one direction, there are traders who believe that there will be a pullback or decline in prices. Importantly, Fibonacci traders assert a pullback will most likely occur at the Fibonacci retracement levels of 23.6%, 38.2%, 61.8%, or 76.4%.
In most cases, Fibonacci Retracement can be utilized in different time frames. Nevertheless, the smaller the time frame, the closer the Fibonacci lines to each other. This may result in wrong readings.
The Fibonacci Golden Zone Indicator is a really useful tool. The above-mentioned indicator can be used in all types of trading strategies. However, you shouldn’t rely only on the Fibonacci Golden Zone Indicator when it comes to trading.
MT4 and its role
Let’s focus our attention on MT4.
As a reminder, a currency trading platform is a software interface provided by forex brokers to their clients in order to give them access as traders in the forex markets.
Currency trading platforms may also provide tools for research in addition to tools for order processing.
At the moment, the MetaTrader 5 (MT5) is one the most popular currency trading platforms. The above-mentioned platform was released more than ten years ago as an additional platform to MT4. Interestingly, MT4 is even more popular than MT5.
Both platforms are flexible trading systems that allow for the trading of forex. It is noteworthy that MT5 isn’t an update to MT4 but rather a system with a different purpose. Apart from forex, it is possible to trade stocks, CFDs, as well as futures.
We need to mention that MT4 and MT5 provide fundamental as well as technical analysis in order to help traders make informed trading decisions.
None of them are open-source software. However, both of them are openly extensible and customizable platforms. So, developers have the ability to create scripts and automated algorithms that execute within their framework.
Retail traders from all over the world use MT4. Interestingly, many brokers that offer their own platforms also offer MT4 integration so that the above-mentioned traders familiar with MT4 will have the ability to migrate their own tools to the new brokerage with ease.
Forex trading strategies
It is hard to overestimate the importance of forex trading strategies. Let’s take a look at the forex trading strategies.
First of all, it is desirable to select a forex trading strategy based on your needs. For example, you need to take into account your trading style, risk tolerance, etc.
We can start with scalping. It is a very popular trading strategy. Interestingly, the above-mentioned trading strategy is focused on smaller market movements.
Scalping involves opening a significant number of trades in an attempt to bring small profits per each.
Consequently, scalpers work in order to generate larger profits by generating a significant number of smaller gains. Notably, this approach is the opposite of holding a position for hours, days, or even weeks.
The above-mentioned strategy is popular among traders due to its liquidity. We shouldn’t forget about volatility.
Scalping also has its disadvantages. It is noteworthy that you can’t afford to stay in the trade too long. Furthermore, the trading strategy mentioned above requires a lot of time and attention.
Let’s focus our attention on day trading. It refers to the process of trading currencies in one trading day. Day trading can be used in all markets; however, it is mostly used in forex.
Even though applicable in all markets, the strategy mentioned above is usually used in forex.
It is important to note that no position should stay open overnight to minimize the risk. As opposed to scalpers, who are looking to stay in markets for several minutes, day traders usually stay active over the day.
They monitor the information that comes from the media. It is no secret that various events, such as statistics, elections, etc, have a serious influence on the forex market.
To sum up, the Fibonacci Golden Zone Indicator is a really useful tool. However, it is important not to forget about its disadvantages as well. It is strongly recommended to read as much as possible about the indicator mentioned earlier and the forex market in general.