Fibonacci theory

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Fibonacci theory

Fibonacci theory was discovered by Leonardo Fibonacci who was a mathematician from Italy. He found a unique series called Fibonacci series: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144 … Fibonacci series is obtained by starting with number 1 followed by number 2 and then adding numbers 1 and 2 to get number 3. Then add numbers 2 and 3 to get number 5 and so on. The interesting thing about the Fibonacci series is the ratio of the number (n-1) compared to the number (n) will always get a decimal value of 0.618 for example (34/55 = 0.618) and (89/144 = 0.618).
Fibonacci theory

Leonardo Fibonacci

The next interesting thing
example: 34 / (1+ 1+ 2+ 3+ 5+ 8 + 13 + 21 + 34) = 0.38
example: 89 / (1+ 1+ 2+ 3+ 5+ 8 + 13 + 21 + 34 + 55 + 89) = 0.38
What’s interesting about this Fibonacci theory is that the series pattern does not only occur in calculations but also occurs in natural phenomena, for example, the pattern on the tree branch which if we count the branches will get Fibonacci numbers so on certain flower petals such as flat daisies even having 34 or 35 petals even up to 89.
The uniqueness of this pattern is then taken as a tool when doing forex trading which is known as the Fibonacci retracement and Fibonacci extension levels. You as a trader do not need to calculate the details of how the numbers are obtained because the trading platform has been calculated correctly.
Fibonacci Retracement Levels
0.236, 0.382, 0.500, 0.618, 0.764Fibonacci Extension Levels
0, 0.382, 0.618, 1,000, 1,382, 1,618
The Fibonacci indicator is used to determine support and resistance levels as well as to determine the take profit level. And what needs to be remembered is that this indicator will work effectively if there is a trend and the determination of swing high and swing low is right.
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