Fibonacci Extensions

Trading with Fibonacci Mathematics

 

Fibonacci mathematics can help traders uncover the hidden proportionality in market behavior. Fibonacci extension analysis examines the extent of primary trends and countertrends to identify key reversal zones—levels where a trending market may lose momentum and reverse. » Fibonacci Sequence and Phi

Calculating the Basic Ratios Using the Fibonacci Sequence

The Fibonacci sequence begins as follows: 0, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, etc. This sequence can be broken down into ratios. These Fibonacci ratios are derived by dividing one number in the sequence by another.

Excluding the initial numbers, we observe that:

✅ Every number is approximately 1.618 times the preceding number.

✅ Every number is approximately 0.618 of the number that follows it.

Note that 1.618 is known as the golden ratio, and its inverse is 0.618.

Key Ratios for Financial Trading

In financial trading, the key Fibonacci ratios are 0.236, 0.382, 0.618, 1.618, 2.618, and 4.236. Many traders also use 0.5 and 1.0.

Table: Key Fibonacci Ratios for Financial Trading

The Fibonacci sequence produces useful trading tools such as Fibonacci Retracement and Fibonacci Extensions.

Read more: Fibonacci Extensions

eBook Trading Using Phi and the Fibonacci Numbers

eBook: Trading World Markets Using Phi and the Fibonacci Numbers

The Complete Guide to Fibonacci Trading and Phi by George M. Protonotarios

The complete guide to Fibonacci trading and Phi, with references to Elliott Waves, Dow Theory, Gann Numbers, and Harmonic Patterns, designed for successful trading in the global financial markets—including Forex currencies, stocks, indices, metals, and energies.

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Introduction to the "Trading World Markets" Book

This book covers a wide range of trading theories and methodologies involving Fibonacci numbers and their applications. It includes all the basic Fibonacci trading practices and tools based on Fibonacci ratios. Phi and Fibonacci numbers are not just another technical analysis tool; Phi proportions appear everywhere—in art, architecture, the spiral of our DNA, and even in natural plant formations.

The first chapter explores the mathematical properties of Phi and its applications beyond financial markets. The following chapters cover Dow Theory, Elliott Wave Theory, and Gann numbers. At the end of each chapter, you’ll discover how these theories relate to Fibonacci numbers. You’ll also learn how to use Fibonacci numbers to create a trading system based on Fibonacci Moving Averages (MAs). Additionally, the book explains popular Fibonacci tools such as Fibonacci Retracement, Fibonacci Extension, and Fibonacci Fan. Two chapters focus on Harmonic Trading and Harmonic Patterns—one of the most advanced trading techniques, entirely based on Fibonacci proportions. Six basic harmonic patterns are detailed, with their properties and chart examples. The final chapter discusses money management and how the irrational brain affects our daily decision-making.

-TABLE OF CONTENTS-

INTRODUCTION

• CHAPTERS:

1. THE ORIGINS OF FIBONACCI NUMBERS AND PHI (Φ)
2. THE DOW THEORY AND FIBONACCI NUMBERS
3. THE ELLIOTT WAVE THEORY AND FIBONACCI NUMBERS
4. W. D. GANN AND FIBONACCI NUMBERS
5. FIBONACCI NUMBERS AND MOVING AVERAGES
6. FIBONACCI RETRACEMENT AND OTHER TOOLS
7. INTRODUCTION TO HARMONIC TRADING
8. SIX HARMONIC PATTERNS
9. THE IRRATIONAL BRAIN & MONEY MANAGEMENT

• APPENDIX

1. Dow Jones Industrial Record Highs
2. Heikin-Ashi Charts

By combining the information and tools presented throughout the chapters, you have the opportunity to build the foundation of a trading system out of chaos—a system that can help you become less emotional when trading the global markets and significantly improve your chances of winning.

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■ Trading World Markets Using Phi and the Fibonacci Numbers

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