Fibonacci Sequence The Golden Ratio
The sequence of some numbers is called as the Fibonacci Numbers or Fibonacci Sequence. Leonardo Fibonacci is an Italian mathematics' who lived in the 13th century. He analyzed a data lining with particular ratio which’s believed as a lining that will always be existing in the universe, including the currency movement.
The data lining that Fibonacci referred to was 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, …
The Fibonacci Sequence data lining is started from 1 and 2. The third lining is from the addition of the first and second lining, which will be 3.
The 4th lining will also be gotten by adding the second and third lining, which will be 5.
The first lining = 1
The second lining = 2
The third lining = the first lining + second lining = 1+2=3
The fourth lining = the second lining + third lining = 2+3=5
The fifth lining = the third lining + fourth lining = 3+5=8
The sixth lining = the fourth lining + fifth lining = 5+8=13
The seventh lining = the fifth lining + sixth lining = 8+13=21
Etc…
After certain lining, there will be the same number of division, for example 34/55 = 0.618, 34/89=0.382, etc…
0.618 is derived on n/n+1, where n is a lining number
0,0.382 is derived on n/n+2, where n is a lining number
Price Retracement Levels (Golden mean Ratio)
0.236, 0.382, 0.500, 0.618, 0.764
Price Extension Levels (Golden mean ratio)
0,0.382, 0.618, 1.000, 1.382, 1.618
As a forex trader, you do not need to be confused with all of mathematic calculation above. You only need to understand the basic of Fibonacci sequence the golden ratio.
The forex trading charts provided by Oanda (FX-Trade) has provided an additional tool to draw the required Fibonacci chart.
Thank you for visiting our blog Learn Forex Trade ..
Read More about Technical Analysis:
Bookmark/share this article with others:The data lining that Fibonacci referred to was 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, …
The Fibonacci Sequence data lining is started from 1 and 2. The third lining is from the addition of the first and second lining, which will be 3.
The 4th lining will also be gotten by adding the second and third lining, which will be 5.
The first lining = 1
The second lining = 2
The third lining = the first lining + second lining = 1+2=3
The fourth lining = the second lining + third lining = 2+3=5
The fifth lining = the third lining + fourth lining = 3+5=8
The sixth lining = the fourth lining + fifth lining = 5+8=13
The seventh lining = the fifth lining + sixth lining = 8+13=21
Etc…
After certain lining, there will be the same number of division, for example 34/55 = 0.618, 34/89=0.382, etc…
0.618 is derived on n/n+1, where n is a lining number
0,0.382 is derived on n/n+2, where n is a lining number
Price Retracement Levels (Golden mean Ratio)
0.236, 0.382, 0.500, 0.618, 0.764
Price Extension Levels (Golden mean ratio)
0,0.382, 0.618, 1.000, 1.382, 1.618
As a forex trader, you do not need to be confused with all of mathematic calculation above. You only need to understand the basic of Fibonacci sequence the golden ratio.
The forex trading charts provided by Oanda (FX-Trade) has provided an additional tool to draw the required Fibonacci chart.
- First ratio (price retracement levels) is used to identify support and resistance which are formed from retrace/dip/pullback.
- Second ratio (price extention levels) is used to determine the target of profit taking.
Thank you for visiting our blog Learn Forex Trade ..
Read More about Technical Analysis:
- Technical Analysis in Forex Trading
- Forex Trading Charts
- Japanese Candlestick Patterns
- Forex Pattern Recognition
- Hammer and Hanging Man Patterns
- Support and Resistance Indicator
- Forex Trendline Indicator
- Forex Channel Indicator
- Understanding Fibonacci Squence
- Fibonacci Retracement
- Moving Average Method
- Which are is better between SMA and EMA?
- Forex Trading Common Indicators
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