| Fibonacci, Actually named Leonardo of Pisa, was born | | | | The use of Fibonacci numbers in trading has become |
| in Pisa, Italy about 1175 A.D.. Today, he is recognized | | | | increasingly popular in recent years. It does not take |
| as the greatest European mathematian of the middle | | | | long when looking at charts to see several examples |
| ages. Fibonacci is credited with introducing the | | | | of Fibonacci tracements. On numerous occassions I |
| Arabic-Hindu numeral system to Europe. He also | | | | have watched analysts making market predictions on |
| introduced the decimal system. Both became the | | | | T.V. shows. I will often check the charts about what |
| basis of mathematics we use today. Enough | | | | they discussed. Some of the predictions for new |
| background for now. | | | | price levels are dead on Fib. retracement numbers. |
| Although Fibonacci covered an entire realm of | | | | Fibonacci numbers, as with all technical indicators |
| mathematics, the main numbers used in trading are | | | | should not be used by themselves. They should be |
| actually percentages. The percentages are 38.2%, | | | | combined with other indicators to make a complete |
| 50%, and 61.8%. These areas are viewed as trend | | | | system to trade with. I do believe that Fibonacci |
| retracement points. The most commonly held theory | | | | numbers should be a part every traders list of |
| is that a 38.2% retracement of a trend is a failed | | | | indicators. They do seem to be extremely accurate, |
| reversal and theoverall trend should continue. A | | | | This could possibly a self fufilling prophecy. If enough |
| retracement to the 61.8% mark signals that the | | | | people believe it, they will cause it to hold true. |
| retracement is the beginning of a new trend. The | | | | In any case, if you do not currently use them, you |
| 50% level is used for different strategies if confirmed | | | | may want to look into it. |
| by several other signals | | | | |