Fibonacci

Fibonacci numbers are named after the Italian mathematician Leonardo of Pisa, later known as Fibonacci. Each number is the sum of the two preceding ones, starting from one. The beginning of the sequence is thus 1, 2, 3, 5, 8, 13, 21, 34 ... The ratio of the two nearest neighbours tends to 1.618.

The ratios of the following numbers are also important. It was discovered that many natural processes develop following these ratios, that is, they appear in biological settings, such as branching in trees or the arrangement of leaves on a stem. This is known as the "golden ratio". Assuming that price cycles follow similar rules, we can derive a series of new indicators for price/time intervals.

Using Fibonacci ratios, we can determine areas of support or resistance.

1. From the "Fibonacci" button menu, select the "Fibonacci entry.
2. Then click the starting position of the element in the chart.
3. Then, move the line that appears to the desired location in the chart.
4. Click at the end point and fan out the Fibonacci retracements with the mouse by dragging the line.
5. Click when you reach the desired width.
   The Fibonacci lines are drawn. You can now select and move it or drag at one of the end points to make it longer or shorter or change the slope. Use the centre touch point to stretch or contract the lines.
   

   

In the chart, parallel lines are drawn for the following values (Fibonacci retracements)

• 0
• 0.236
• 0.382
• 0.5
• 0.618
• 0.786
• 1

For more information about working drawing elements, see Edit drawing elements and Delete drawing elements.