The golden section is a very useful technical indicator for novice or experienced foreign exchange traders. It can be used as a single technical index to analyze the market situation, and it can also be used in combination with other technical indicators to play its great role. The golden section connects the highest price and the lowest price.

For example, the trend of USD/JPY on the chart. The golden section connects the high point 105.86 and the low point 104.69. What you see is the sixth price position, which is 0%, 38.2%, 50%, 6 1.8%, 78.6%, 100% respectively.

What is the purpose of percentage? The reason is that after a certain period of sharp rise or fall, the price will move in the opposite direction to the original direction. Usually, the golden section uses percentage to explain the market situation. However, traders usually like to mark the golden section with price, so as to see the moving direction of a pair of currencies more clearly. You can use percentage or price or percentage and price to mark the golden section.