Strategy for Forex trading “Overlapping Fibonacci Trade”

The trading strategy “Overlapping Fibonacci Trade” is based on the concept of overlapping Fibonacci levels. Fibonacci levels are widely used in technical analysis and in trading practice. One Fibonacci level indicator may be important for trading, but two such indicators in combination are a powerful combination.Most traders come to the concept of overlapping Fibonacci levels independently, after a long time of using this tool in their trading.As a rule, they use Fibonacci restorations or expansions, looking for coincidence of Fibonacci level with other signals, such as support and resistance, centers, etc. The idea of closing off Fibonacci would probably be an exciting discovery. Why is that? (Laughs)Since very often, all you need to trade is when two strong Fibonacci levels coincide with support and resistance zones, for example, very likely to lead to some applicable reaction. Many traders find the simplicity of such a strategy and do not use anything else in trading.Below are examples of charts that are likely to be the best way to illustrate the concept.Let’s take any chart with a reasonable price movement up or down, with some moderate corrections along the way, and set the Fibonacci gridThis illustration shows two Fibonacci grids drawn on a strong downward trend. Yellow Fibonacci lines – the result of drawing from the top level in the left corner of the chart and down to the turn indicated by the first white circle. The blue Fibonacci lines are the result of drawing from the lower top of the spread (which coincidentally formed a double top) to the same spread where the yellow grid is stretched.Here we see two possible entrances when the yellow Fibonacci recovery level is 38%, combined with the blue Fibonacci recovery level of 79%This chart shows a similar situation on an uptrend. Here the white circle indicates the possibility of entering after the appearance of a candlestick model of absorption at the coincidence of 79% and 38% recovery levels.Note that any of the Fibonacci recovery levels can match from 38% to 50%, to 62%, to 79%.It is also possible to trade on the basis of coincidences that occur at Fibonacci expansion levels of 123%, 162% and others. The process of finding matches is exactly the same: on any chart the Fibonacci grid is stretched with additional allowed levels.When applying the “Overlapping Fibonacci Trade” strategy, do not forget to trade with other events and signals, if they are available. The choice of a broker is also important.