Fibonacci
Fibonacci was an Italian mathematician who came up with the Fibonacci numbers in the 13th century. Fibonacci numbers are extremely famous with technical analysts who trade the capital markets since they can be applied to any timeframe.
The Fibonacci sequence of numbers is as follows: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc. Each term in this sequence is simply the sum of the two preceding terms, and the sequence continues infinitely. Most important characteristics of this numerical sequence are that each one number is approximately 1.618 times greater than the previous number.
The widely used of Fibonacci levels are retracement levels and extension levels. Fibonacci retracement levels represent levels to which the price could retrace before continues the previous trend. It's a division of the vertical distance between a major low and a major high into sections based on the key ratios of 23.6%, 38.2%, 50% and 61.8%.
Instrument Price tends to come back to these areas before resuming the major trend. Fibonacci extension levels represent levels that the price could reach after an initial swing and retracement.A Fibonacci retracement is a widely used tool among technical traders.
possible support and resistance levels
A Fibonacci retracement is a popular tool that analyst can use to predict support and resistance zones, and put stop-loss orders or target prices.
