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Written by admin admin
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Friday, 15 February 2008 |
Fibonacci
Fibonacci is a massive subject and there are a lot of different areas you could investigate,however, for the purposes of the method to be used in this training material, we shall onlybe concentrating on a few specific points.Leonardo Pisano (Nickname Fibonacci) was a mathematician, born in 1170, in Pisa, Italy.Fibonacci had also learnt accounting. Fibonacci contributed to the science of numbers, andintroduced the Fibonacci sequenceThe Fibonacci sequence is the sequence of 1,1,2,3,5,8,13,21,34,55,89,144 etc every next numberis the sum of preceding two.There are also fibonacci ratios, by comparing the relationship with each number, and eachalternate number and even number to the one to the four places to the right, we arrive at somefairly consistent ratios. The important ones are .236, .50, .382, .618, .764, 1.382 1.618, 2.618, 4.236.For example if you divide 34 by 89 = 0.382. As a trader you do not need to go into the mechanicsof working out the numbers, as your charting program will work all this out for you.It turns out that the Fibonacci ratios are prevalent in nature around us, in the universe, in plantsetc, so what you may ask is how come one should apply the fibonacci techniques to thetrading environment.Traders study the
charts, and Fibonacci ratios can be applied to the price scale and also to thetime scale of the charts. Prices never move in a straight line, they advance then retrace, and ifyou normally look at the price patterns they tend to retrace in Fibonacci proportions often enough.I will show you some examples below; GBPUSD on a 4 hour chart. Easy Forex Trading Strategies Share Your Opinion. (0 posts)
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Last Updated ( Friday, 15 February 2008 )
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