Overview

 

Born around the year 1170, a mathematician named Leonardo Fibonacci discovered the relationship of what are now referred to as Fibonacci numbers while studying the Great Pyramid of Gizeh in Egypt.

Fibonacci numbers are a sequence of numbers in which each successive number is the sum of the two previous numbers:

1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 610, etc.

This sequence of numbers have an interesting number of interrelationships, such as the fact that any given number is approximately 1.618 times the preceding number and any given number is approximately 0.618 times the following number. The Fibonacci sequence also plays a very vital role in technical analysis of stocks. There are four types of studies based on these numbers:

  • Arcs
  • Fans
  • Retracements
  • Time Zones

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