Fibonacci Forex Trading | Investing Guide & Tutorial
Fibonacci forex trading is a good example of how an understanding of mathematical theory can help elevate the skill of an FX trader. Fibonacci and forex trading go hand-in-hand to understand where the market may bounce towards – either lower or higher – and therefore help traders make shrewd investing decisions. A Fibonacci forex trading strategy can be quickly understood with a walk-through of the fundamentals. We also cover the tools and charting software needed to get started trading forex using the Fibonacci sequence.
What Are The Fibonacci Numbers?
Introduced by Italian mathematician Leonardo Pisano Bogollo in the 13th century, the Fibonacci sequence is a series of numbers in which after 0 and 1, each following number is found by adding up the two numbers that go before it:
0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987, 1597, 2584, 4181, 6765, 10946, 17711, 28657, 46368, 75025, 121393, 196418, 317811…
If you look closely, it is working as follows:
- 0 + 1 = 1
- 1 + 1 = 2
- 1 + 2 = 3
- 2 + 3 = 5
- 3 + 5 = 8
- 5 + 8 = 13
And so forth… It can continue on to infinity.
Forex Brokers With Fibonacci Chart Patterns
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Pepperstone provides forex spreads on the EUR/USD averaging just 0.12 pips with their Razor account. This is highly competitive. Their extensive portfolio includes over 100 currency pairs, which exceeds what most rivals offer. Furthermore, Pepperstone stands out by offering three unique currency indices: USDX, EURX, and JPYX, which are rare on other platforms. They have been recognised with our 'Best Forex Broker' award twice.
GBPUSD Spread EURUSD Spread GBPEUR Spread 0.4 0.1 0.4 Total Assets FCA Regulated Platforms 100+ Yes MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade, Quantower -
XTB offers over 60 currency pairs with competitive spreads, averaging 1 pip on major pairs. The xStation platform is user-friendly, featuring over 30 indicators in its charting package and a variety of order types, supporting diverse trading strategies and risk management.
GBPUSD Spread EURUSD Spread GBPEUR Spread 1.4 1.0 1.4 Total Assets FCA Regulated Platforms 70+ Yes xStation -
FXCC champions its competitive forex trading environment. ECN spreads can drop to an impressive 0.0 pips during busy trading periods. Offering more variety than many competitors, it supports over 70 currency pairs. Furthermore, traders benefit from MT4, renowned for its exceptional charting capabilities, specifically designed for forex trading.
GBPUSD Spread EURUSD Spread GBPEUR Spread 1.0 0.2 0.5 Total Assets FCA Regulated Platforms 70+ No MT4, MT5 -
IBKR offers a vast range of over 100 forex pairs, including major, minor, and exotic currencies, outstripping most competitors except CMC Markets. Trading is available across multiple platforms with institutional-grade spreads beginning at 0.1 pips. There are also 20 sophisticated order types, such as brackets, scale, and one-cancels-all (OCA) orders, enhancing trading strategies.
GBPUSD Spread EURUSD Spread GBPEUR Spread 0.08-0.20 bps x trade value 0.08-0.20 bps x trade value 0.08-0.20 bps x trade value Total Assets FCA Regulated Platforms 100+ Yes Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, TradingView, eSignal, TradingCentral, ProRealTime, Quantower -
Vantage provides over 55 currency pairs, exceeding the industry norm, giving traders ample opportunities. With a robust liquidity pool, forex spreads start at 0.0 pips on the ECN account, often beating other options. Additionally, there are no commissions, deposit fees, or hidden charges.
GBPUSD Spread EURUSD Spread GBPEUR Spread 0.5 0.0 0.5 Total Assets FCA Regulated Platforms 55+ Yes ProTrader, MT4, MT5, TradingView, DupliTrade -
IC Markets remains dedicated to offering tight 0.0-pip spreads on major currency pairs like EUR/USD, ensuring outstanding execution with an average speed of 35 milliseconds. Ideal for traders seeking high performance, those dealing in large volumes can also enjoy rebates of up to $2.50 per forex lot.
GBPUSD Spread EURUSD Spread GBPEUR Spread 0.23 0.02 0.27 Total Assets FCA Regulated Platforms 75 No MT4, MT5, cTrader, TradingView, TradingCentral, DupliTrade, Quantower -
FOREX.com remains a leading FX broker, providing 80 currency pairs with highly competitive fees. EUR/USD spreads can reach as low as 0.0, with a $7 commission per $100k, making it a standout choice.
GBPUSD Spread EURUSD Spread GBPEUR Spread 1.3 1.2 1.4 Total Assets FCA Regulated Platforms 84 Yes WebTrader, Mobile, MT4, MT5, TradingView
Pepperstone
XTB
FXCC
Interactive Brokers
Vantage FX
IC Markets
Forex.comSafety Comparison
Compare how safe the Fibonacci Forex Trading | Investing Guide & Tutorial are and what features they offer to protect traders.
| Broker | Trust Rating | FCA Regulated | Negative Balance Protection | Guaranteed Stop Loss | Segregated Accounts |
|---|---|---|---|---|---|
| Pepperstone | ✔ | ✔ | ✘ | ✔ | |
| XTB | ✔ | ✔ | ✔ | ✔ | |
| FXCC | ✘ | ✔ | ✘ | ✔ | |
| Interactive Brokers | ✔ | ✔ | ✘ | ✔ | |
| Vantage FX | ✔ | ✔ | ✘ | ✔ | |
| IC Markets | ✘ | ✔ | ✘ | ✔ | |
| Forex.com | ✔ | ✔ | ✘ | ✘ |
Payments Comparison
Compare which popular payment methods the Fibonacci Forex Trading | Investing Guide & Tutorial support and whether they have trading accounts denominated in British Pounds (GBP).
| Broker | GBP Account | Debit Card | Credit Card | Neteller | Skrill | Apple Pay |
|---|---|---|---|---|---|---|
| Pepperstone | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ |
| XTB | ✔ | ✔ | ✔ | ✔ | ✔ | ✘ |
| FXCC | ✔ | ✔ | ✔ | ✔ | ✔ | ✘ |
| Interactive Brokers | ✔ | ✔ | ✘ | ✘ | ✘ | ✘ |
| Vantage FX | ✔ | ✔ | ✔ | ✔ | ✔ | ✘ |
| IC Markets | ✔ | ✘ | ✔ | ✔ | ✔ | ✘ |
| Forex.com | ✔ | ✔ | ✔ | ✔ | ✔ | ✘ |
Mobile Trading Comparison
How good are the Fibonacci Forex Trading | Investing Guide & Tutorial at mobile trading using apps or other mobile interfaces.
| Broker | Mobile Apps | iOS Rating | Android Rating | Smart Watch App |
|---|---|---|---|---|
| Pepperstone | iOS & Android | ✘ | ||
| XTB | iOS & Android | ✔ | ||
| FXCC | iOS & Android | ✘ | ||
| Interactive Brokers | iOS & Android | ✔ | ||
| Vantage FX | iOS & Android | ✘ | ||
| IC Markets | iOS & Android | ✘ | ||
| Forex.com | iOS & Android | ✘ |
Beginners Comparison
Are the Fibonacci Forex Trading | Investing Guide & Tutorial good for beginner traders, that might want an affordable setup to get started, along with good support and educational resources?
| Broker | Demo Account | Minimum Deposit | Minimum Trade | Support Rating | Education Rating |
|---|---|---|---|---|---|
| Pepperstone | ✔ | $0 | 0.01 Lots | ||
| XTB | ✔ | $0 | 0.01 Lots | ||
| FXCC | ✔ | $0 | 0.01 Lots | ||
| Interactive Brokers | ✔ | $0 | $100 | ||
| Vantage FX | ✔ | $50 | 0.01 Lots | ||
| IC Markets | ✔ | $200 | 0.01 Lots | ||
| Forex.com | ✔ | $100 | 0.01 Lots |
Advanced Trading Comparison
Do the Fibonacci Forex Trading | Investing Guide & Tutorial offer features that allow for more advanced trading strategies?
| Broker | Automated Trading | Pro Account | Leverage | VPS | AI | Low Latency | Extended Hours |
|---|---|---|---|---|---|---|---|
| Pepperstone | Expert Advisors (EAs) on MetaTrader | ✔ | 1:30 (Retail), 1:500 (Pro) | ✔ | ✘ | ✔ | ✘ |
| XTB | - | ✔ | 1:30 | ✘ | ✘ | ✔ | ✘ |
| FXCC | Expert Advisors (EAs) on MetaTrader | ✘ | 1:500 | ✔ | ✘ | ✔ | ✘ |
| Interactive Brokers | Capitalise.ai, TWS API | ✘ | 1:50 | ✘ | ✔ | ✔ | ✔ |
| Vantage FX | Myfxbook AutoTrade, Expert Advisors (EAs) on MetaTrader | ✘ | 1:30 | ✔ | ✘ | ✘ | ✘ |
| IC Markets | Expert Advisors (EAs) on MetaTrader, cBots on cTrader, Myfxbook AutoTrade | ✘ | 1:30 (ASIC & CySEC), 1:500 (FSA), 1:1000 (Global) | ✔ | ✘ | ✔ | ✘ |
| Forex.com | Expert Advisors (EAs) on MetaTrader | ✘ | 1:30 | ✔ | ✔ | ✔ | ✘ |
Detailed Rating Comparison
Use this heatmap to compare our detailed ratings for all of the Fibonacci Forex Trading | Investing Guide & Tutorial.
| Broker | Trust | Platforms | Mobile | Assets | Fees | Accounts | Support | Research | Education |
|---|---|---|---|---|---|---|---|---|---|
| Pepperstone | |||||||||
| XTB | |||||||||
| FXCC | |||||||||
| Interactive Brokers | |||||||||
| Vantage FX | |||||||||
| IC Markets | |||||||||
| Forex.com |
Our Take On Pepperstone
"Pepperstone is a premier trading platform, providing tight spreads, swift execution, and sophisticated charting tools for seasoned traders. Beginners benefit from no minimum deposit, comprehensive learning materials, and outstanding 24/7 support."Tobias Robinson
Reviewer
Pros
- Pepperstone offers rapid execution speeds of approximately 30ms, enabling swift order processing and execution, making it ideal for traders.
- The award-winning customer support can be accessed through phone, email, or live chat. During tests, response times have consistently been under 5 minutes.
- Pepperstone presents itself as an economical choice for traders, offering spreads as low as 0.0 in its Razor account. The Active Trader programme provides rebates up to 30% on indices and commodities, plus $3 per lot on forex.
Cons
- Although its market range has improved, its crypto offerings remain limited compared to brokers specialising in this sector, lacking real coin investment options.
- Pepperstone doesn't offer cTrader Copy, a favoured feature for copying trades found in the cTrader platform, which is available on other platforms such as IC Markets. However, Pepperstone has launched its own user-friendly copy trading app.
- Pepperstone's demo accounts expire after 30 days, which may not provide sufficient time to explore various platforms and evaluate trading strategies.
Our Take On XTB
"XTB excels for novice traders with its superb xStation platform, minimal trading costs, no required deposit, and outstanding educational resources, many of which are fully integrated into the platform."William Berg
Reviewer
Pros
- XTB has raised interest rates on uninvested funds and introduced zero-fee ISAs (for ETFs and real shares, or 0.2% on trades over €100k) for UK clients, offering access to a wide array of markets.
- XTB processes withdrawals swiftly, paying within 3 business days, subject to the method and amount.
- The xStation platform stands out with its user-friendly design and intuitive tools, such as adaptable news feeds, sentiment heatmaps, and a trader calculator. These features streamline the learning process for new traders.
Cons
- XTB lacks a raw spread account, a feature increasingly offered by competitors such as Pepperstone. This omission might not satisfy traders seeking the most competitive spreads.
- Trading fees are competitive, with average EUR/USD spreads of about 1 pip. However, they are not as low as the most affordable brokers, such as IC Markets. Additionally, an inactivity fee applies after a year.
- It is frustrating that XTB products do not allow traders to modify the default leverage level. Manually adjusting leverage can greatly reduce risk in forex and CFD trading.
Our Take On FXCC
"FXCC remains a top choice for forex traders, offering over 70 currency pairs, very tight spreads from 0.0 pips in tests, and high leverage up to 1:500 with the ECN XL account."
Pros
- There are no limitations on short-term trading techniques such as trading and scalping.
- The complimentary education section, featuring the 'Traders Corner' blog, provides a wide array of resources suitable for traders of all experience levels.
- FXCC is a trusted and licensed broker under the regulation of CySEC, a leading European authority ensuring excellent safeguarding standards.
Cons
- The variety of currency pairs surpasses most options, but the choice of other assets is limited. Notably, stocks are absent.
- FXCC's exclusive MetaTrader platform is a limitation, especially when compared to more versatile options like AvaTrade, which offers five different platforms to cater to various trader needs.
- While the MetaTrader suite excels in technical analysis, its outdated design detracts from the overall trading experience, particularly when contrasted with contemporary platforms such as TradingView.
Our Take On Interactive Brokers
"Interactive Brokers ranks highly for seasoned traders due to its robust charting platforms, live data, and bespoke layouts via the new IBKR Desktop app. Its competitive pricing and sophisticated order choices appeal to traders, and its wide equity options are industry-leading."
Pros
- IBKR consistently offers unparalleled access to global equities, with thousands of shares available across over 100 market centres in 24 countries, including the recently added Saudi Stock Exchange.
- A wide range of third-party research subscriptions, both free and paid, are available for traders. Additionally, by subscribing to Toggle AI, traders can receive commission rebates from IBKR.
- The TWS platform is tailored for intermediate and advanced traders, featuring over 100 order types and a dependable real-time market data feed with exceptional uptime.
Cons
- The learning curve for TWS is quite steep, making it tough for novice traders to navigate and grasp all its features. In contrast, Plus500's web platform is far more accessible for those new to trading.
- You are limited to a single active session per account, meaning you cannot use both your desktop programme and mobile app at the same time. This restriction can occasionally lead to a frustrating experience for traders.
- Support can be sluggish and frustrating. Tests reveal that you may face challenges reaching customer service quickly, which could result in delays in issue resolution.
Our Take On Vantage FX
"Vantage is an ideal choice for CFD traders looking for a well-regulated broker with access to the dependable MetaTrader platforms. With a swift sign-up process and a minimum deposit of $50, starting trading is simple and fast."Tobias Robinson
Reviewer
Pros
- Opening a live account is both straightforward and swift, requiring under 5 minutes to complete.
- The trading software suite is outstanding, featuring the acclaimed MT4 and MT5 platforms.
- Vantage addresses the needs of passive investors through user-friendly social trading on ZuluTrade and Myfxbook.
Cons
- To access optimal trading conditions, a substantial deposit of $10,000 is required. This includes a commission of $1.50 per transaction per side.
- Regrettably, cryptocurrencies are accessible solely to clients in Australia.
- It's unfortunate that some clients must register with the offshore firm, which provides reduced regulatory safeguards.
Our Take On IC Markets
"IC Markets provides excellent pricing, swift execution, and easy deposits. With cutting-edge charting tools like TradingView and the Raw Trader Plus account, it continues to be a preferred option for intermediate and advanced traders."
Pros
- IC Markets provides reliable 24/5 support, especially for account and funding queries, drawing from direct experience.
- Access over 2,250 CFDs across diverse markets like forex, commodities, indices, shares, bonds, and cryptocurrencies. This variety enables traders to employ diversified strategies.
- In 2025, IC Markets earned DayTrading.com's accolade for 'Best MT4/MT5 Broker' due to its top-tier MetaTrader integration. This achievement highlights the broker's continuous refinement over the years to enhance the platform experience.
Cons
- IC Markets provides metals and cryptocurrencies for trading through CFDs, though the selection is narrower compared to brokers such as eToro. This limits opportunities for traders focused on these asset classes.
- The tutorials, webinars, and educational resources require enhancement, lagging behind competitors such as CMC Markets, which diminishes their appeal to novice traders.
- Certain withdrawal methods incur fees, including a $20 charge for wire transfers. These costs can reduce profits, particularly with frequent withdrawals.
Our Take On Forex.com
"FOREX.com excels in serving traders of all levels, offering more than 80 currency pairs, spreads starting at 0.0 pips, and competitive commissions. Its robust charting platforms provide over 100 technical indicators and comprehensive research tools."
Pros
- With more than two decades of expertise, strong regulatory governance, and numerous accolades, including a second-place finish in our 'Best Forex Broker' awards, FOREX.com is globally renowned as a reliable trading platform.
- FOREX.com provides top-tier forex rates beginning at 0.0 pips, along with attractive cashback rebates up to 15% for dedicated traders.
- An abundance of educational resources is available, such as tutorials, webinars, and an extensive YouTube channel, designed to enhance your understanding of financial markets.
Cons
- Demo accounts are typically limited to 90 days, hindering effective strategy testing.
- FOREX.com's MT4 platform provides around 600 instruments, a notable reduction compared to the more than 5,500 options on its other platforms.
- Funding choices are restricted when compared to top options such as IC Markets. Many popular e-wallets, including UnionPay and POLi, are noticeably absent.
Using The Fibonacci Numbers For Forex Trading
The Fibonacci sequence can be translated into a forex trading strategy due to some interesting relationships identified within these numbers.
The Fibonacci Forex Trading Golden Ratio
- If you divide a number by the previous number, you would get approximately 1.618. This number is used as a key level for Fibonacci extensions. 1.618 is known as the ‘golden ratio’ of ‘phi’.
- If you were to divide a number by its subsequent highest number, you would get approximately 0.618. This number works to provide the basis of the 61.8% Fibonacci forex retracement level. 0.618 is also particularly interesting as it is found throughout biology, nature and the cosmos, from the shape of playing cards and snail shells to Greek vases and the spiral galaxies of outer space.
- If you were to divide a number by another two places higher than the original number, you would get approximately 0.382. This number is used to form the basis of the 38.2% Fibonacci trading retracement level.
Retracements
Fibonacci forex trading retracements provide investors with price levels for support and resistance where a reversal in direction might take place. As such, they can be used to establish entry levels. These retracements are predicated on the prior move within the market.
For example, if there has been a rise in price, traders can measure the move from bottom to top to understand where the price might retrace to before bouncing back and continuing on an overall upward trend.
However, if there has been a fall in price, traders could measure the move from top to bottom so they can understand where the price might retrace to before it corrects lower, and continues on an overall downward trend.
Extensions
As well as providing price points for support and resistance, Fibonacci forex trading extension levels can calculate how far a price might travel once a retracement has finished. If retracements are used to identify the start of a trend, then Fibonacci extension levels can be used to target the end of the trend.
Setting Up A Fibonacci Forex Trading Strategy
The first step is to understand how Fibonacci works in forex trading. You then need to identify in which direction the market is trending. Fibonacci retracement tools can then be employed to identify and monitor the three potential Fibonacci resistance levels – 0.236, 0.382 and 0.618. The direction you drag the retracement tool will depend on if it’s an upward or downward trend.
Tools
When setting up a Fibonacci forex trading strategy, you will need software, such as the MetaTrader 5 (MT5) platform. This provides Fibonacci indicators that enable traders to plot retracement and extension levels.
Traders just need to be able to measure X to A cycles. Once you have measured this distance, the software can divide the vertical distance using the various Fibonacci ratios to plot the Fibonacci levels.
Note, it’s worth checking out tutorial videos on YouTube and detailed PDFs online to see how a Fibonacci forex strategy is set up.
Pros Of Fibonacci Forex Trading
There are several benefits to using the Fibonacci numbers for forex trading, namely that the ratios act as primary mechanisms within a countertrend investing strategy. They help to show the direction that a previous trend is likely to follow and aid in identifying resistance levels, placing stop-loss orders, and helping traders to set target prices.
Cons Of Fibonacci Forex Trading
Even when using Fibonacci retracement levels for forex trading, investors should be wary of trends. Traders should always check trends that are occurring within a current or longer time frame, ensuring that mistakes are not made when it comes to predicting the direction of travel. Errors can lead to large losses.
The Fibonacci formula is particularly ineffective with shorter-term day trading. Volatility can make support and resistance levels inaccurate. Spikes and whipsaws can also occur in the short-term which can make it difficult to place accurate stops and take profit levels.
Is Fibonacci Forex Trading A Good Strategy?
Fibonacci forex trading can provide investors with useful market signals. With that said, there are no guarantees of large profits. To start Fibonacci forex trading, choose a broker with easy-to-use Fibonacci calculators and software that let you easily plot retracements and extensions on charts.
FAQ
What Are The Fibonacci Numbers?
The Fibonacci numbers are a straightforward sequence that consists of adding the proceeding two numbers up, starting 0, 1, 1, 2, 3, 5, 8, 13. The relationship between these numbers can be translated into an effective forex strategy.
When Should I Use A Fibonacci Forex Trading Strategy?
Fibonacci forex trading strategies are most effective during a market trend. Retracements and extensions can be used to identify future price points. However, Fibonacci strategies are less effective during short-term trends due to market volatility.
What Tools Do I Need For a Fibonacci Forex Trading Strategy?
To set up a Fibonacci forex trading strategy, you need a broker that offers straightforward charting software, such as MetaTrader 4 (MT4). You can then open a forex chart and select the Fibonacci tool from the menu bar. Most software lets you drag and drop retracements and extensions, saving you from manual maths.
Is Fibonacci Forex Trading Easy?
Fibonacci forex trading is relatively straightforward compared to other strategies. Once a trader understands how the Fibonacci numbers and formula works, investors just need to identify a trend and use charting software to plot the necessary retracements and extensions.
Is Fibonacci Forex Trading Legal In The UK?
Yes, Fibonacci forex trading is legal in the UK. Most FCA-regulated brokers offer Fibonacci tools and software. Speak to a broker’s customer support team to check Fibonacci tools and software are available before opening an account.