Leonardo Fibonacci was a famous Italian mathematician and inventor of a series of numbers bearing the same name. This series is the sum of the two preceding numbers are as follows:
1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233 ....
As the number increases the ratio between a number given above and the following: 0.618 and back gives the number 1.618.
55 / 89 = 0.618 89 / 55 = 1.618
89 / 144 = 0.618 144 / 89 = 1.618
144 / 233 = 0.618 233 / 144 = 1.618
And if you do the division between two different numbers gives us:
0.382 34/144 = 0.382
89/233 = 0.382
Fibonacci numbers have been used extensively in the financial world, for our case study only Retracting the Fibonacci numbers and those of Explansión.
Retracting Fibonacci (Fibonacci Retracement)
The numbers in this series are as follows: 0, 0.236, 0.382, 0.500, 0.618, 0.764 and 1.
The Fibonacci Folding is used to determine support and resistance. And the way they are calculated is by determining the maximum and minimum.
Minimum: The lowest point on a curve with at least Minimum two (one left and one on the right) of greater value.
Maximum: The major point on a curve with at least two peaks (one left and one right) of lesser value.
The following example illustrates the use of Fibonacci Replicating on a uptrend, to determine support and resistance:
You have to remember that not always work, but is a guide, rather a suggestion in price levels or areas that should pay attention ... something like train stations.
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