Fibonacci Pattern

 

 
  

Fibonacci 

is a sequence of numbers discovered by Leonardo Fibonacci, an
Italian mathematician: 0, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610,

987, 1597, 2584, 4181, 6765, 10946, 17711, 28657, 46368, 75025, 121393 .......
Fibonacci numbers are started by 0, followed by 1, and then the third number
is calculated through adding 0+1 (the first and the second number). Then for
getting the forth number (3), the second and third numbers should be added
(1+2) and ......

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if you measure the ratio of each number to the next one, you will have the
Fibonacci Ratios that are the same numbers (levels) we use in our Forex market
technical analysis: 0.236, 0.382, 0.500, 0.618, 0.764 .......
To use these numbers in technical analysis you don’t have to make any
calculation and you don’t have to even memorize them because all the trading
platforms let you draw the Fibonacci levels and they have everything ready to
use.

 

Fibonacci trading means to know when and where market reverses to keep on
moving. The most important thing in Fibonacci trading is that the Fibonacci
levels act as support and resistance. When the price goes up, they act as the
resistance and visa versa. Also like ordinary supports and resistances, when a
Fibonacci level is broken as a resistance, it can act as a support and to be

 

retested. It is the same as when a Fibonacci level becomes broken as a support
(it can act as a resistance then). Major ratios drawn from Fibonacci numbers
describe a predictable interaction between trend and counter and counter
trend movements in markets. The most important ones to remember are 38.2%,
50% and 61.8%. applying these percentages to trending price predicts the
extent of retracement contrary to the underlying trend, as well as how far a