best fibonacci levels
Fibonacci retracement levels are ratios used to identify potential reversal levels. These ratios are in the Fibonacci sequence. The most popular Fibonacci retracement levels are 61.8% and 38.2%. Note that 38.2% is often rounded to 38% and 61.8 is often rounded to 62%. After raising charts, specialists apply Fibonacci ratios to determine retracement levels and predict the degree of retracement or retracement. Fibonacci retracement levels can also be applied after a decline to predict the duration of a rebound against a trend. These pullbacks can be combined with other indicators and price patterns to create an overall strategy.
best fibonacci levels
This article is not intended to delve too deeply into the mathematical properties underlying the Fibonacci sequence and the golden ratio. There are many other sources for this detail. However, some basics will provide the necessary foundation for the most popular numbers. Leonardo Pisano Bogollo (1170–1250), an Italian mathematician from Pisa, is credited with introducing the Fibonacci sequence to the West. It looks like this: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610 ...…
The sequence extends to infinity and contains many unique mathematical properties.
• After 0 and 1, each number is the sum of the two previous numbers (1 + 2 = 3, 2 + 3 = 5, 5 + 8 = 13 8 + 13 = 21, etc.).
• The number divided by the previous one is approximately equal to 1.618 (21/13 = 1.6153, 34/21 = 1.6190, 55/34 = 1.6176, 89/55 = 1.6181). The approach is getting closer to 1.6180 as the number increases.
• The number divided by the next largest number is approximately 0.6180 (13/21 = 0.6190, 21/34 = 0.6176, 34/55 = 0.6181, 55/89 = 0.6179, etc.) Etc.). The approximation is getting closer to 0.6180 as the number increases. This is the basis for a 61.8% correction.
• The number divided by the other two digits above gives approximately 0.3820 (13/34 = 0.382, 21/55 = 0.3818, 34/89 = 0.3820, 55 / = 144 = 3819, etc.) ... The approach is getting closer to 0.3820 as the number increases. This is the basis for a 38.2% correction. Also note that 1 - 0.618 = 0.382
• The number divided by three more places above is approximately equal to 0.2360 (13/55 = 0.2363, 21/89 = 0.2359, 34/144 = 0.2361, 55/233 = 0.2361, etc.) Etc.). The approximation is getting closer to 0.2360 as the number increases. This is the basis for a 23.6% retracement.
1.618 refers to the golden ratio or golden ratio, also called phi. The inverse of 1.618 is 0.618. These relationships can be found in nature, architecture, art, and biology. In his book The Elliott Wave Principle, Robert Prechter quotes William Hoffer in the December 1975 issue of Smithsonian Magazine:
... The ratio of 0.618034 to 1 is the mathematical basis for the shape of playing cards and the Parthenon, sunflowers and snail shells, Greek vases and spiral galaxies of outer space. The Greeks based much of their art and architecture on this proportion. They called it the golden mean.
