FIBO   Leave a comment

Italian mathematician, Leonardo Fibonacci, devised a series of numbers in ratios that is also determine the Market.  These ratios levels (23.6%, 38.2%, 50.0%, 61.8%, and 76.4%) serve as the solid SUPPORT and RESISTANCE. 61.8% is most promising. Each point may be entry or exit points, depending upon your trade strategy.

Also in Statistics, For the normal distribution, the values less than one standard deviation away from the mean account for 68.27% of the set of values. Forex data due to huge set of data is expected to be normally distributed.

so, we can conclude that 60-70% line in fibonacci is the Golden Ratio line. It means in this line, most of the data has been retraced already, so expected a Pull back after major data’s  (60-68%) retraced. This combined alignment of fibo and bell shaped normal distribution’s concept is my own hypothesis.

FIBONACCI TYPES:

How to use Fibonacci?
The SWING is very important to be noted and identified before we construct it. Else result may go wrong.

  • If market has gone from below to top (Bullish), and returning down, then, u need to construct fibo line from lowest swing to topmost swing. The below will give 100 to top with 0 value.
  • Just reverse case.

 

  • FIBONACCI RETRACEMENT

    Fibonacci_Retracement

LESSON: Certainly, Fibonacci retracement levels do not work 100% of the time. No indicator is perfect. But it does provide traders an edge in making profits.

FIBONACCI EXPANSION:
The corresponding lines are drawn from the reference point on the interval equal to 61.8, 100%, and 161.8 per cent of the unit interval.

FIBONACCI ARC:
Fibonacci Arcs are built as follows: first, the trend line is drawn between two extreme points, for example, from the trough to the opposing peak.

FIBONACCI FAN:

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Posted April 13, 2015 by arjunlimbu

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