Leonardo Fibonacci was
an Italian mathematician who lived between 1170-1240. He is considered
to have discovered his famous sequence of numbers during his
observations of the Great Pyramid in Giza (Egypt). The Fibonacci
sequence is a numerical series where every added number is the sum of
the preceding two: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc.
There are some interesting ratios between these numbers.
For example, every number is approximately 1.618-fold as much as the
preceding one, and every preceding number makes approximately 0.618 of
the successive one (Golden Ratio).
There are some widely known technical analysis tools based on
Fibonacci numbers. General principle of interpretation of these tools
is the following: If the prices approaches to the lines built using
these tools, the changes in the trend development are highly probable.
Line Studies