Brief introduction of Fibonacci:
The term "Fibonacci" is familiar to almost all of us who have studied advanced mathematics or are involved in the Forex trading business. In fact, "Fibonacci" is the name of a famous mathematician, born in Italy, Europe, full name "Leonardo Pisano (Fibonacci)" and lived from 1160 to 1250.
A groundbreaking mathematical genre / series of these famous mathematicians has been used for the last 600 years as a powerful research tool by scientists, physicians, engineers, businessmen, agriculturists and researchers of various professions, known as "Fibonacci Series". Before we know why and how the Fibonacci series is used in Forex trading, we need to know a little bit about the Fibonacci series.
Introduction to Fibonacci series:
Although Fibonacci was born in Italy in Europe, Fibonacci travels with his father to different countries of the world, where his father is a high-ranking envoy.
He witnessed widespread profitable use. Fibonacci is all about 1200. He returned to the country after his travels and wrote several valuable books on those profitable uses of mathematics, one of which was called "Liber Abbaci". In the third volume of this book he presented a mathematical question to the readers. Suppose a person keeps a pair of baby rabbits in a walled area for rearing, then how many pairs of rabbits per year will be produced from the initial one pair, assuming that one pair of rabbits per month, a new rabbit. Will produce and each new pair of rabbits will produce one new pair of rabbits from next month ???
. . . To determine the answer to this question, it was suggested to use this mathematical formula (1, 1, 2, 3, 5, 6, 13, 21, 34, 55, 69,...) Where each number is determined as the sum of the previous two numbers. Done. It should be noted that rabbits are widely reared in farmhouses to meet the demand for meat in many countries of the world like farm chickens in our country. The mathematical series we observed above, i.e., 1, 1, 2, 3, 5, 6, 13, 21, 34, 55, 69, 144, ..... this is the famous Fibonacci series, this series is well.
Notice that if the first number is omitted, each number is the sum of the previous two numbers, e.g. (0 + 1 = 1), (1 + 1 = 2), (1 + 2 = 3), (2 + 3 = 5), (3 + 5 = 6), (5 + 6 = 13), (6 +13 = 21), (13 + 21 = 34), (21 + 34 = 55), (34 + 55 = 69), (55 + 89 = 188),. . . . . Etc.
Examples of Fibonacci series in nature:
In fact, the use of Fibonacci series / series is not limited to rabbits or cows and goats, but the use of this series in nature is widespread, as we can see from the following two examples.
In the figure above, we can see that the number / series / series following which the branches of the tree gradually grow upwards is basically the exact Fibonacci series. A copy of the series.
Similarly, in the figure above, we can see that the number / series / series following which the leaves of the tree gradually increase towards the top is basically a copy of the exact Fibonacci series, or series.
Fibonacci series / feature (quality):
Although the Fibonacci series seems to be a very simple mathematical series, this mathematical series is actually a very significant mathematical series. The main feature (multiplication) of this mathematical series / series lies in the proportional increase and decrease in the numbers in this series. Below are some examples of this briefly.
Divide the Fibonacci series number by the next number in that series.
Divide the Fibonacci series number by the previous number in that series,
Looking at the quotient above, we can see that the numbers in the Fibonacci series have increased and decreased in a certain proportion from the numbers before and after that series.
Similarly, we see the numbers in the Fibonacci series being divided by the number one step before and one step after the series -
Thus, we can similarly infer from the above quotient that there is a special proportional relationship between the numbers in the Fibonacci series. If we write the Fibonacci ratios consecutively as in the table below, we can see that as the Fibonacci series numbers increase, the ratios become limited to a certain value.
This is how we determine the existing ratios between the numbers in the Fibonacci series. The values we get are 0,236, 0,372, 0.617, 1,000, 1.617, 2.617, 4,236, ..., etc.
However, some more ratios have been added to the Fibonacci ratios, for example, 0.500, this 0.500 ratio has been determined by basically determining the two basic ratios as simple averages of 0.362 and 0.617. And the main reason for determining all these averages is that these averages also work really well as Fibonacci ratios.
Forex and stock trading forex is used to estimate the future position of the market (approximate future price is determined) and buy and sell decisions are made accordingly using the existing ratios of the above Fibonacci numbers.
For this purpose some ratios are used for Fibonacci Retracement and some ratios are used for Fibonacci Extension. Note that Fibonacci Extension ratios are also used to determine the value of Fibonacci Projection.
Fibonacci Golden Mean / Ratio:
Among the Fibonacci ratios, 0.618 and 1.618 are opposite of each other, so the product of both is 1, these two 0.618 and 1.618 ratios are called Fibonacci Golden Mean / Ratio.
Naturally, these two ratios are the two most commonly used, that is, the two ratios of an object decrease and increase more.
However, other Fibonacci ratios (e.g., 0.382, 2.618, etc.) are also referred to by many experts as Golden Mean / Ratio, since dividing the numbers after or before the Fibonacci series by one step / two steps before that series, or by the next number, gives the same ratio over and over again.
The relationship of the human race with Fibonacci ratios:
Not only the Fibonacci number but also the Fibonacci ratios are closely related to many areas of nature and human beings. If we compare the whole body with the different parts of the body of an average height person, we will see that it is possible to describe the structural structure of an average height person by Fibonacci ratios.
Also, if we take a look at the painting below, we can see that the painting below is painted by the world famous oil painter "Monoline" by the painter "Leonardo da Vinci"
Thus Fibonacci ratios are observed not only in the physical constitution of human beings but also in human transactions, banking activities, stock markets, etc. and this is why the widespread application of Fibonacci formulas in the Forex trading market can be noticed.
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