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# Basic Fibonacci Trading. by Neal Hughes (FibMaster) http://www.fibmaster.

com

Lesson 3: The .618 Fibonacci ratio .Table of contents: Page 04 Page 06 Page 09 Lesson 1: Introduction Lesson 2: The .382 Fibonacci ratio.

When you look at any chart you will easily see the ebb and flow of a stock as its’ price advances and retraces.html We do have to cover some ground before we can get to the charts.236. so his focus here will be on the price scale. and not precisely to the penny. 2. Indices. 13.uk/~history/Mathematicians/Fibonacci. Fibonacci. and is also in man-made objects. http://www-groups. all instruments which are liquid. which is the series of numbers where each number is the sum of the two preceding numbers. and for good measure we include 1. 1.618.ac. the dimensions of human bodies. 5. It turns out that the ratios are mathematical principles prevalent in nature around us. 1.Lesson 1: Introduction Fibonacci is the basis of many trading methodologies. prices never move in a straight line. So. . But very often. but it really isn't. Fibonacci is best remembered for his Fibonacci sequence.00. in plants. 1.618.236. Fibonacci numbers and ratios appear in ancient buildings. we arrive at some fairly consistent ratios.382. but it is interesting. entertaining. and of course rabbit populations. 3.. But of what use is all that to the intrepid trader? Traders usually study charts! Fibonacci ratios may be applied to the Price scale and also to the time scale of charts. and so close as to be truly amazing! . and advance in Fibonacci proportions.764. when you have the time. planets. 2. Not always.618. . 8. Futures.st-and. There are many interesting. We're not going to bore you with the history of Leonardo Pisan. . Neal applies his Fibonacci analysis to the price scale.. and many billions of dollars are traded every year based on Fibonacci techniques. 55… What we are interested in is the ratio between these numbers: the Fibonacci ratios. and even each number to the one four places to the right. Remember.382. molecules. Stocks. take a look at the following link for some biographical info.50. 4. and poetic observations about Fibonacci numbers and ratios in the universe. will often retrace in Fibonacci proportions. 34. The important ones are . and each alternate number. This can start to look complicated. Forex. 1.. 21. By comparing the relationship between each number. .dcs.