Using Fibonacci Time Studies

[B]Do you have the time?[/B] Fibonacci analysis can be enhanced by using time projections. Fibonacci time forecasts are applied to a chart like other Fibonacci studies, and work best when combined with either a retracement or fan study. When you are in a trade, the time study will help you watch for points in which reversals are likely to occur. When you are looking for new trade opportunities with a retracement or fan study, the time forecast can add to the probability of a successful outcome.Fibonacci Time forecasts also add weight to potential support or resistance levels, and help identify when a bounce or change of trend could appear. Knowing where and when you may want to pay the most attention to your analysis is a great way to optimize your trading efforts. A time forecast uses the Fibonacci number series (1,1,2,3,5,8,13,21…) to identify potential “areas of interest” in the future. They are applied very easily to a chart at a significant price bottom or top. Usually it is applied at the same price point you would use to attach the first anchor point of a Fibonacci retracement or fan study. How it works In the chart below you can see a time projection applied to the top of the August-November trend on the EUR/USD on 11/23. Usually, you will ignore the first five very closely clustered vertical lines as noise (I will explain why a little later), and you will start paying attention to the wider spaced 6, 7, 8 and 9 lines. There are lines beyond that, but they begin trending out so far into the future that you will probably have updated your analysis by then. As you can see, the time study below identified some likely volatility “nodes” where reversals may have been expected. In this case, the study proved accurate in the timing of three reversals... To see the rest of this article and a video, click here: [url]http://www.learningmarkets.com/index.php/200901211320/Forex/Forex-Technicals/using-fibonacci-analysis-part-five.html[/url]