Fibonacci calculator stretches from understanding of the Fibonacci numbers, the golden ratio, the golden triangle and the working principles of the Fibonacci calculator.
The Fibonacci Sequence is comprised of series of numbers:
0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55 ...
The corresponding number is found by adding up the two numbers before it, this is the basic principles of the Fibonacci numbering as studied by Euclid.
A longer list applies below;
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...
This is the most interesting part of Fibonacci numbers or numbering system, especially for traders. If one takes any two successive Fibonacci Numbers from a particular point, their ratio is very close to the Golden Ratio “φ” which is approximately 1.618034. Forex commodities are in the golden ratio if their ratio is the same as the ratio of their sum to the larger of the two quantities as in forex commodities. The inverse of 1.618034 is equal to 0.618034.
The bigger the fibonacci numbers, the closer the approximation. Approximation is applied when the value of a FOREX commodity is highly placed. This helps in managing of the forex trends and market.
HOW DOES A TRADER USE GOLDEN RATIO / FIBONACCI NUMBERS?
Fibonacci calculator can help set two set of numbers. This set of numbers can be seen as levels of the Fibonacci numbers or levels of the Golden ratio as utilised by a Forex trader. This includes;
This can be calculated by the Fibonacci retracement. In a sense, Fibonacci retracements follow a series of continuation patterns. The degree of the retracement is estimated under the vertical length of the security's support and resistance levels. In this the level, the market finds more demand. It can also be identified on a technical basis by seeing where the stock has bottomed out in the past enabling losses in the future to be averted.
This calculated based on the Fibonacci extension calculator system. These are the levels at which market finds more supply just away from the support level where demands are high.
When the Fibonacci calculator is used in addition to the Elliot Waves, it can give remarkable results to FOREX traders. A FOREX trader could use these ratios example is the golden ratio to find high probability trades with very small stop losses.
Alternatively, these ratios (golden ratio) can be used to find Elliott Waves extensions when certain systems are adjusted. Profit bookings near those levels are made.
SO HOW DOES THE FIBONACCI CALCULATOR WORK?
Fibonacci calculations can be used for any forex commodity and with any time frame. Retracement levels are better used fortimeframes one would like to trade. Multiple time frames should be avoided to avoid multiple trade orders.
Fibonacci calculator also helps one to calculate Fibonacci extension and retracement levels for the market price adjustments.
In any market, the corrections usually end near golden ratio or one of the other fibonacci retracement levels. The extensions are used to find next impulse targets and unique points.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.