Fibonacci mathematics is a fascinating subject. It's also an integral part of Elliott wave analysis. Frost & Prechter's classic "Elliott Wave Principle -- Key to Market Behavior" has an entire chapter on it. (You get a free copy of the book with any EWI subscription.)
We also have several other resources, free and paid, that show you how to use Fibonacci ratios in market analysis. Here's an excerpt from a free Club EWI report on the subject.
Enjoy -- and for details on how to read this free report in full, look below.
How To Apply Fibonacci Math to Real-World Trading
(Free Club EWI report, excerpt)
Financial markets demonstrate an uncanny propensity to reverse at certain Fibonacci levels. The most common Fibonacci ratios to forecast retracements are .382, .500 and .618.
You can imagine how helpful these can be: Knowing where a corrective move is likely to end often identifies high probability trade setups (Figures 7-1 and 7-2).
- Calculate Fibonacci extensions
- Draw Fibonacci Circles
- Use Fibonacci Fan
- Calculate Fibonacci timing projections to identify turning points in markets
- More