Trade the market with MathMagic Numbers

[Narenraj]

I would like to show you the trading opportunity using the favorite collections of numbers.

The Fibonacci
I hope there are few Fibonacci fans.

A quick peek for the beginner about the Fibonacci.
and the logic and calculation will ease to understand Fibonacci tools

The Fibonacci Sequence is the series of numbers:

0, 1, 1, 2, 3, 5, 8, 13, 21, 34, …

The next number is found by adding up the two numbers before it.

The 2 is found by adding the two numbers before it (1+1)
The 3 is found by adding the two numbers before it (1+2),
And the 5 is (2+3),
and so on!

Here is a longer list:
0, 1, 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, 196418, 317811, …
Can you figure out the next few numbers?

In terms of application Fibonacci number appears in nature often.
The number of petals on a flower is typically a Fibonacci number.

are the number of spirals on a sunflower or pineapple tends to be a Fibonacci number as well
In fact, there is much more application of Fibonacci numbers but what
I find most inspirational about them is their NUMBER PATTERN

square each Fibonacci number
One square is one
Two squares is four
Three squares is nine
Five square is twenty-five. And so on

It is no surprise when you add previous two number you get next Fibonacci number and that how they are created.

Add the squares together(refer the above picture)
1+1=2
1+4=5
4+9=13
9+25=34
And the pattern continues.

And try doing this too…

Add the first few squares of few Fibonacci numbers.

6, 15, 40, 104 are not Fibonacci numbers
But if you look closely you will see Fibonacci number buried inside that.

6=23
15=35
40=58
104=813

Let’s look at the following equation.
why should the square of

1 +1+2+3+5+8=8*13

Let’s understand by drawing a simple picture

Let’s start with one by one square next to that draw another one by one square together
one by two rectangle.
below that draw two by two square and three by three square
five by five square and eight by eight square

creating one giant rectangle.

Now say what is the area of a rectangle.
from first point the "It’s the sum of the areas of square inside it.
and another point is
The area is equal to its hight*base
and the height is clearly 8.
and the base is 5+8 which is the next Fibonacci number 13.

hence the square of 1,1,2,3,5,8 add up to 8 times 13.

Continue this process to generate rectangles of 1321 & 2134 and so on

Now divide 13/8=1.625
and if you divide the larger number by smaller number these ratio gets closer and closer to about 1.618

Known to many peoples as
THE GOLDEN RATIO

The number which fascinated mathematician, scientist, and artist for centuries.

All this explains to us clearly there is so much these Fibonacci numbers can do while trading.

Further in this thread, i will discuss tools created by using Fibonacci.
Understanding Fibonacci tools & levels.
plotting and predicting price using Fibonacci.

[Narenraj]

EU have support at 1.05117.
Eur have good chance to pull back to 1.05310

SL at 1.05051

[anon5370623]

@Narenraj

I would like to show you the trading opportunity using the favorite collections of numbers.

The Fibonacci
I hope there are few Fibonacci fans.

A quick peek for the beginner about the Fibonacci.
and the logic and calculation will ease to understand Fibonacci tools

The Fibonacci Sequence is the series of numbers:

0, 1, 1, 2, 3, 5, 8, 13, 21, 34, …

The next number is found by adding up the two numbers before it.

The 2 is found by adding the two numbers before it (1+1)
The 3 is found by adding the two numbers before it (1+2),
And the 5 is (2+3),
and so on!

Here is a longer list:
0, 1, 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, 196418, 317811, …
Can you figure out the next few numbers?

In terms of application Fibonacci number appears in nature often.
The number of petals on a flower is typically a Fibonacci number.

are the number of spirals on a sunflower or pineapple tends to be a Fibonacci number as well
In fact, there is much more application of Fibonacci numbers but what
I find most inspirational about them is their NUMBER PATTERN

square each Fibonacci number
One square is one
Two squares is four
Three squares is nine
Five square is twenty-five. And so on

It is no surprise when you add previous two number you get next Fibonacci number and that how they are created.

Add the squares together(refer the above picture)
1+1=2
1+4=5
4+9=13
9+25=34
And the pattern continues.

And try doing this too…

Add the first few squares of few Fibonacci numbers.

6, 15, 40, 104 are not Fibonacci numbers
But if you look closely you will see Fibonacci number buried inside that.

6=23
15=35
40=58
104=813

Let’s look at the following equation.
why should the square of

1 +1+2+3+5+8=8*13

Let’s understand by drawing a simple picture

Let’s start with one by one square next to that draw another one by one square together
one by two rectangle.
below that draw two by two square and three by three square
five by five square and eight by eight square

creating one giant rectangle.

Now say what is the area of a rectangle.
from first point the "It’s the sum of the areas of square inside it.
and another point is
The area is equal to its hight*base
and the height is clearly 8.
and the base is 5+8 which is the next Fibonacci number 13.

hence the square of 1,1,2,3,5,8 add up to 8 times 13.

Continue this process to generate rectangles of 1321 & 2134 and so on

Now divide 13/8=1.625
and if you divide the larger number by smaller number these ratio gets closer and closer to about 1.618

Known to many peoples as
THE GOLDEN RATIO

The number which fascinated mathematician, scientist, and artist for centuries.

All this explains to us clearly there is so much these Fibonacci numbers can do while trading.

Further in this thread, i will discuss tools created by using Fibonacci.
Understanding Fibonacci tools & levels.
plotting and predicting price using Fibonacci.

The point is that in this long informative write up you provided good overview of Fibonacci use but ultimately failed to explained WHY it has to work on markets? Is it just rough assumption or there is some underlying concept as well?

[Narenraj]

The point is that in this long informative write up you provided good overview of Fibonacci use but ultimately failed to explained WHY it has to work on markets? Is it just rough assumption or there is some underlying concept as well?

The Mysterious legacy: Fibonacci sequence.

Let’s begin by understanding that psychology plays an important role while trading.

The sequence 1,1,2,3,5,8,13,21… moves towards certain irrational ratio forming an endless unpredictable sequence of the decimal number which cannot be expressed precisely.

In short piece of writing, we quote as 1.618 and often referred as Golden ratio, Golden mean, divine proportion, In algebra, it is known as Phi.

The ratio around the Phi number can be easily understandable by knowing the relationship between numbers.
• A number divided by the previous number is approximately 1.618(21/13=1.618…)
• A number divided by next highest number is approximately (13/21=0.618) and this referred to 61.8% in Fibonacci retracement level.
• A number divided by another two place is approximately 0.3823(13/34). And this referred to 38.2% in Fibonacci retracement level.

Or it is easy to understand by the following method.
• 1:1=10000 less than phi by 0.618.
• 2:1=20000 more than the phi by 0.3820.
• 3:2=1.5000 less than phi by 0.1180
• 5:3=1.6667 more than phi by 0.0486
• 8:5=1.6000 less than phi by 0.0180.
And the sequence continuous when each number is divided by the previous number,
Reaching closer and closer to 1.618.

There is a lot common between nature and chart reading.
Anything based on phi is indeed beautiful and which have no phi looks ugly and unnatural.

Ralph Nelson Elliot in his theory to identify the price movements (wave patterns) uses Fibonacci sequence to measure waves.

In Elliot Wave Principle, Robert Prechter quotes,
….the proportion of .618034 to 1 is the mathematical basis for the shape of playing cards and the Parthenon, sunflowers and snail shells, Greek vases and the spiral galaxies of outer space.

The Greeks, mathematicians, scientist, naturalist, artist, architecture base much of this proportion.

There is a lot to prove that the phi has the fundamental in nature, from the honey bee, spiral in sunflower, snail, pineapple, banana, plant, petals in a rose, starfish, shark… and the list goes on…

If you want something to measure easily.
Then try this.
• Measure from shoulder to finger tip.
• Measure from Elbow to finger tip.
Divide the larger number to smaller.

• Measure from head to foot.
• Then Belly bottom to foot.
The result will be same and close to 1.618, the golden ratio is unavoidable.

As most traders agree that psychology plays a vital role while trading.
And consciously or subconsciously we seek the golden ratio.

In technical analysis, we apply this sequence in five different methods
• Fibonacci retracement
• Fibonacci arc.
• Fibonacci Time Zone.
• Fibonacci Expansion.
• Fibonacci Extension.
And typically into three section 38.2%, 50%, 61.8% and we use more multiplication if need like 23.6%, 161.8%, 423% and so on.

The very basic yet very important aspect in
Technical analysis is Support and resistance.

Where do we draw support and Resistance level?

Support and resistance refers to supply and demand, the identical meaning of supply is bearish or selling, and for demand is Bullish or buying.

The support line is drawn by applying the logic and when the price approaches near to support it is expected that demand will overcome and vice versa.

Instead of picking up support & resistance level randomly, one can refer Fibonacci retracement levels.

Fibonacci retracement horizontal line indicates areas of support or resistance.
They are calculated by first locating the high and low or low and high on the chart.

In downtrend five lines are drawn, the first at 100% (the high on the chart), the second at 61.8%, the third at 50%, the fourth at 38.2% and the last one at 0%

[lexys]

All this explains to us clearly there is so much these Fibonacci numbers can do while trading.

I’m afraid it just doesn’t, at all.

It doesn’t actually even [B][U]begin[/U][/B] to suggest that these Fibonacci numbers have [I]anything[/I] to do with trading at all.

Sorry to sound so outspoken, but I think it’s all just delusional.

Horoscopes are positively scientific, compared with the way traders try to use Fibonacci levels, in my opinion.

I’ve never seen anything other than anecdotal, cherry-picked evidence suggesting that Fibonacci levels are any better or more predictive or meaningful than randomly drawn lines (which, by the way, can be really impressive-looking, too).

But I’ve seen a [U][B]lot[/B][/U] of objective, independent, academic evidence showing that they’re not.

One might find this link about the use and abuse of Fibonacci numbers, in general interesting. (Just my “two pips” ).

[Narenraj]

Sorry to sound so outspoken, but I think it’s all just delusional.

You don need to be sorry to express you view on fibonacci.

Fibonacci Based analysis is always controversial since many centuries.

[Narenraj]

I’m afraid it just doesn’t, at all.

It doesn’t actually even [B][U]begin[/U][/B] to suggest that these Fibonacci numbers have [I]anything[/I] to do with trading at all.

Sorry to sound so outspoken, but I think it’s all just delusional.

Horoscopes are positively scientific, compared with the way traders try to use Fibonacci levels, in my opinion.

I’ve never seen anything other than anecdotal, cherry-picked evidence suggesting that Fibonacci levels are any better or more predictive or meaningful than randomly drawn lines (which, by the way, can be really impressive-looking, too).

But I’ve seen a [U][B]lot[/B][/U] of objective, independent, academic evidence showing that they’re not.

One might find this link about the use and abuse of Fibonacci numbers, in general interesting. (Just my “two pips” ).

Everyone have the controversy with everything or few things which you think is the best, from Apple to Einstein theory, and google to god.
No wonder that Fibonacci have absuers too

[anon5370623]

The Mysterious legacy: Fibonacci sequence.

Let’s begin by understanding that psychology plays an important role while trading.

The sequence 1,1,2,3,5,8,13,21… moves towards certain irrational ratio forming an endless unpredictable sequence of the decimal number which cannot be expressed precisely.

In short piece of writing, we quote as 1.618 and often referred as Golden ratio, Golden mean, divine proportion, In algebra, it is known as Phi.

The ratio around the Phi number can be easily understandable by knowing the relationship between numbers.
• A number divided by the previous number is approximately 1.618(21/13=1.618…)
• A number divided by next highest number is approximately (13/21=0.618) and this referred to 61.8% in Fibonacci retracement level.
• A number divided by another two place is approximately 0.3823(13/34). And this referred to 38.2% in Fibonacci retracement level.

Or it is easy to understand by the following method.
• 1:1=10000 less than phi by 0.618.
• 2:1=20000 more than the phi by 0.3820.
• 3:2=1.5000 less than phi by 0.1180
• 5:3=1.6667 more than phi by 0.0486
• 8:5=1.6000 less than phi by 0.0180.
And the sequence continuous when each number is divided by the previous number,
Reaching closer and closer to 1.618.

There is a lot common between nature and chart reading.
Anything based on phi is indeed beautiful and which have no phi looks ugly and unnatural.

Ralph Nelson Elliot in his theory to identify the price movements (wave patterns) uses Fibonacci sequence to measure waves.

In Elliot Wave Principle, Robert Prechter quotes,
….the proportion of .618034 to 1 is the mathematical basis for the shape of playing cards and the Parthenon, sunflowers and snail shells, Greek vases and the spiral galaxies of outer space.

The Greeks, mathematicians, scientist, naturalist, artist, architecture base much of this proportion.

There is a lot to prove that the phi has the fundamental in nature, from the honey bee, spiral in sunflower, snail, pineapple, banana, plant, petals in a rose, starfish, shark… and the list goes on…

If you want something to measure easily.
Then try this.
• Measure from shoulder to finger tip.
• Measure from Elbow to finger tip.
Divide the larger number to smaller.

• Measure from head to foot.
• Then Belly bottom to foot.
The result will be same and close to 1.618, the golden ratio is unavoidable.

As most traders agree that psychology plays a vital role while trading.
And consciously or subconsciously we seek the golden ratio.

In technical analysis, we apply this sequence in five different methods
• Fibonacci retracement
• Fibonacci arc.
• Fibonacci Time Zone.
• Fibonacci Expansion.
• Fibonacci Extension.
And typically into three section 38.2%, 50%, 61.8% and we use more multiplication if need like 23.6%, 161.8%, 423% and so on.

The very basic yet very important aspect in
Technical analysis is Support and resistance.

Where do we draw support and Resistance level?

Support and resistance refers to supply and demand, the identical meaning of supply is bearish or selling, and for demand is Bullish or buying.

The support line is drawn by applying the logic and when the price approaches near to support it is expected that demand will overcome and vice versa.

Instead of picking up support & resistance level randomly, one can refer Fibonacci retracement levels.

Fibonacci retracement horizontal line indicates areas of support or resistance.
They are calculated by first locating the high and low or low and high on the chart.

In downtrend five lines are drawn, the first at 100% (the high on the chart), the second at 61.8%, the third at 50%, the fourth at 38.2% and the last one at 0%

Ok, Ok, lets us know with your trading progress using Fibo :). At least with right money management you have all chances to stay near the breakeven (even with random trades ;))

[Exampations]

Even though math magic tricks are a little-used aspect of math, they are a creative, entertaining, and interesting method to bring numbers to life

[leonardgeryol]

I remember that Fibonacci believed in lucky numbers. If anyone heard about this any information?

[tommor]

It seems that many traders find percentages too complex to grasp, let alone Fibonacci.