• Leonard Fibonacci, also known as Leonardo of Pisa,was a famous Italian mathematician who discovered asimple series of numbers that created ratios describingthe natural proportions of things in the universe.• Leonardo was given the nickname “Fibonacci”posthumously, possibly derived from his father’sname, Bonacci.• he wrote a book called Liber abaci (Book of
Calculation). This book introduced to the world, the
system of using nine numerals. He expanded hisimpressive mathematical knowledge, and eventuallythis is what has been adopted and applied as thestandard
mathematical system we now use FIBONACCI Numbers• The sequence
of the Fibonacci numbers is 0, 1,1, 2, 3, 5, 8,
13, 21, 34, 55, 89, 144, 233, 377… and goes to
infinity. Starting with zero andadding 1
begins the series. The calculationtakes the sum
of the two numbers and adds itto the
following number• 0+1=1, 1 + 1
= 2; 1 + 2 = 3; 2 + 3 = 5; 3 + 5 = 8,5+8=13, 8+13 =
21, 13+21= 34, 21+34=55,34+55=89,
55+89=144, 89+144=233, 144+233= 377,
233+377=610, 377+610 = 987, 610+987=
1597, 987+1597=2584 FIBONACCI RatiosW W W . G R A
M E E N F O R E X . C O M• Many things
are fascinating about this sequence, but inparticular is
the relationship it has to the golden mean. Ifyou take two
numbers past the eighth sequence and dividethe smaller
number into the larger, you will get 0.618 :• 89 ÷ 144 =
.618• 377 ÷ 610 =
.618• 987 ÷ 1597 =
.618• If we divide
the larger number into the smaller number afterthe eighth
sequence, the result will 1.618:• 377 ÷ 233 =
1.618• 610 ÷ 377 =
1.618•
1597 ÷ 987 = 1.618• Retracement
Ratio: Generally we usethis 5 ratio
to trade with retracement ina trending
market:• 0.236,
0.382, 0.500, 0.618, 0.786
• Extension
Ratio: we use this
extension ration for trendcontinuation•
1.271, 1.618, 2.618, 4.236 How
to draw Fibonacci ratios• In order to
draw Fibonacci levels, you have tofind the
recent significant Swing Highs andSwings Lows.• Then, for
downtrend, click on the Swing Highand drag the
cursor to the most recent SwingLow.• For uptrend,
do the opposite. Click on theSwing Low and
drag the cursor to the mostrecent
Swing High. Drawing
Fibonacci in Downtrend
Drawing
Fibonacci in Upward trend
Combine
Fibonacci with Support and Resistance
Combine
Fibonacci with Trend Line
Combine
Fibonacci with Candlestick patterns
Fibonacci
Expansions
Fibonacci
Trading ?Combine the
Fibonacci retracement toolwith support
and resistance, trend lines,and
candlesticks to find a better entry, itwould be best
to use your knowledge ofthese tools to
analyze the currentenvironment to
help you pick a good Entrypoint
and stop loss point.
