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You can also download the MACD indicator used for this method by clicking on this link. This is because the Fibonacci time zone ratios are not very reliable indicators for predicting the direction of price movement. The indicator will then draw the vertical lines that represent each time zone automatically. The lines tend to cluster at first, reflecting the closeness of the numbers that constitute the number sequence, and from there the lines tend to become less clustered. If the MACD histogram is blue at line 2, then the bias for the trade is upwards. Many authorities will advise ignoring the first 5 time zone ratios, but then if you use a long term chart such as the daily chart as shown above, you can still find opportunities between the clustered areas.

The Fibonacci Time Zone indicator is another tool out of the Fibonacci stable which is based on the Fibo ratios and works just like the Fibonacci retracement and expansion tools. These number sequences are derived by adding the previous two numbers to get a third number. These will therefore form areas of projections of what the price action will do at those areas. This will be reflected in the appearance and spacing of the time zone lines as they are plotted on the chart. The starting point of the Fibonacci time zone method is to be able to draw it correctly on the charts, understand what the vertical lines signify and then use the information derived therein to create a method for trading the binary options market. These lines are potential reversal points. Note the colour of the MACD histogram at the number 2 time zone line. Wait for the price to be located below the line from line 2 to 3, and then wait for it to pullback upwards to this line. It is pertinent to state that this method is best performed on the 4 hour charts exclusively.

The expiry times of the contract is taken to be the time distance between time zone lines to be used for the analysis. The tool must be combined with other indicators of technical analysis, as well as candlestick patterns to pick out these areas of reversal as accurately as possible. However, the Fibonacci Time Zone indicator plots the areas where reversal of price action is to be expected as vertical lines as opposed to the horizontal lines of the retracement and expansion tool. The chart shows the Fibonacci Time Zone ratios drawn on the daily chart of the EURUSD. If the MACD histogram is red, then the bias for the trade is downwards. Practice this on demo until it is perfected. The Fibonacci time zone tool is drawn either from a swing high to low, or a swing low to high depending on what the trend of the asset is. The trades to take on the binary options platforms using the Fibonacci Time Zone tool are the Call option and Put option contracts. The Fibonacci Time Zones tool is based on a sequence of numbers known as the Fibonacci ratios.

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