Introduction to Fibonacci Mathematics

Fibonacci mathematics can help traders to reveal the hidden proportionality of market behavior. Fibonacci extension analysis studies the extends of prime trends and countertrends in order to identify key reversal zones, or else levels where a trending market may lose momentum and reverse.

 

Calculating the Basic Ratios using the Fibonacci Sequence

The Fibonacci sequence of numbers begins as follows: 0, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233 and etc. 

The above sequence can then be broken down into ratios. The Fibo ratios can be found by dividing the Fibonacci numbers into each other.

If we do the math by excluding the first numbers, we realize that:

  • Every number is approximately 1.618 times the preceding number
  • Every number is 0.618 of the number to the right of it

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

 

Key Ratios for Financial Trading

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

Table: Key Fibonacci ratios for Financial trading

0.236

1.000

0.382

1.618

0.500

2.618

0.618

3.618

0.786

4.236

 

Fibonacci Extensions

The Fibonacci sequence of numbers produces useful trading tools such as the Fibonacci retracement and the Fibonacci extensions.

Fibonacci extensions can identify the extent of prime trends and countertrends to spot potential price reversal zones. Let's start by calculating the Fibo extensions above 100.

eBook: Trading World Markets Using Phi and the Fibonacci Numbers

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

 

eBook: Trading World Markets Using Phi and the Fibonacci NumbersThe complete guide to Fibonacci trading and Phi with reference to Elliott Waves, Dow Theory, Gann Numbers, and Harmonic Patterns, for trading successfully the Global Financial Markets (Forex currencies, Stocks, Indices, Metals, and Energies).

► Find the Book at Amazon

This Book covers an enormous range of trading theories and methodologies involving the Fibonacci numbers and their products. You will find all the basic Fibonacci trading practices and tools based on Fibonacci ratios in it. Phi and the Fibonacci numbers do not form just another tool of technical analysis. Phi proportions are everywhere: in arts, architecture, our DNA’s helix spiral, and even in our nature’s plant formations.

The first chapter begins with the mathematical properties of Phi and several of its applications outside the financial markets. In the next few chapters, you will find information about the Dow Theory, the Elliott Wave Theory, and the Gann numbers. At the end of each chapter, you will be able to detect the correlation of each theory with the Fibonacci numbers. You will learn also how you to use the Fibonacci numbers in order to create a trading system based on Fibonacci Moving Averages (MAs). In addition, you will find information about some popular Fibonacci trading tools such as the Fibonacci Retracement, the Fibonacci Extension, and the Fibonacci Fan. There are two chapters dedicated to Harmonic Trading and Harmonic Patterns. Harmonic trading is one of the most sophisticated trading practices and it is entirely based on Fibonacci proportions. Six basic harmonic patterns are presented with their properties and charts with examples. The last chapter is dedicated to money management and the effect of the irrational brain in our everyday decision-making process.

 

Phi and the Fibonacci Numbers-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 in all chapters you have the chance to build the foundations of a trading system out of chaos. A trading system that can make you less emotional when trading the global markets and significantly improve your odds of winning

 

► Find the Book at Amazon

 

■ Trading World Markets Using Phi and the Fibonacci Numbers

TradingFibonacci.com

 

More: » Fibonacci Retracement Tool | » Combining Fibonacci with Support & Resistance | » Combining Fibonacci with Major Technical Analysis Tools | » MT4 / MT5 Fibonacci Indicators

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Trading Resources

Trading Resources

Fibonacci mathematics aims to reveal the hidden proportionality of market behavior. Find Fibonacci trading tools and tutorials:

» Fibonacci Retracement Tool

» Fibonacci Extensions Tool

» Combining Fibonacci with S&R

» Combining Fibonacci with Major TA Tools

» MT4 MT5 Fibonacci Indicators

» Investment Advice & Tips

 

eBOOK: TRADING WORLD MARKETS USING PHI AND THE FIBONACCI NUMBERS (2018)

Guide to Fibonacci Trading with Reference to Elliott Waves, Gann Numbers, and Harmonic Patterns

► Learn more about the ebook | ► Buy it now (Amazon Books)

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