Fibonacci Extension, Projection, Retracement

Fibonacci Numbers and Ratios

Fibonacci sequence, in which each number is the sum of the two preceding ones. The sequence commonly starts from 0 and 1, although some authors start the sequence from 1 and 1 or sometimes (as did Fibonacci) from 1 and 2. Starting from 0 and 1, the first few values in the sequence are: 

Fibonacci number sequence  1+1=2, 1+2=3, 2+3=5, 3+5=8, 5+8=13,8+13=21 ,…..

Succeeding numbers we have 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55,89  to infinity. In the eighth series, by dividing 55 by 89, you have the golden mean:  0.618. If you divide 89 by 55 you have 1.618

These ratios, and various other derivatives of them, appear everywhere in nature, and in financial markets, they often indicate levels where strong resistance and support will be found. They are easily seen in nature, art, geometry, architecture, and music.

 

EXTENSIONS/PROJECTION

61.8% (0.618) 

100% (1.00)

123.6% (1.236)

161.8% (1.618) - This ratio is the most important and is called GOLDEN RATIO

 200% (2.00) 

261.8% (2.618)

323.6% (3.236)

423.6% (4.236)

 681% (6.81)

 

RETRACEMENT

14.6% (0.146) 

23.6% (0.236) 

38.2% (0.382)

 61.8% (0.618) 

76.4% (0.764) 

85.4% (0.854) 

50% (0.5).    -  This ratio is  not a  Fibonacci ratio, but it's still used a lot