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Occasional Musings from a Stock Market Timer
Human Psychology Moves the
Markets
Price Floors and Ceilings Play
a Big Role
Markets Trend and Do Not Walk
Randomly
These Mathematical Tools Help
Spot Turning Points
The Golden Number
Pattern Recognition
and Timing Signals for Stock, Futures, and FOREX Markets Superior Charting Software for the Serious Trader
Simple Longer Term Approach for
the Average Investor
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Fibonacci
Ratios
Leonardo
Pisano (1170-1250), also Known as Fibonacci, was a great Italian
mathematician. A simple sequence of numbers bears his name. The
Fibonacci sequence. An infinite progression where each successive number
in the sequence is the sum of the two number preceding it. Here
it is: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144 and so on. In this
additive sequence the ratio of one number is 1.618 times the preceding number or
0.618 times the next number. This has long been known as the Golden
Ratio and was used by the Egyptians in the construction of the pyramids.
These fibonacci proportions are seen throughout nature. The spirals of
sea shells, the horns of Bighorn Sheep, a spiral galaxy etc. They
are also an important tool for market timing with Elliot Wave Theory.
The up and down movements in the markets exhibit these Fibonacci ratios,
or commonly called Fib ratios.
The size of one wave is very often in Fibonacci proportions to the
preceding wave. There are three main Fib levels. These are 38.2%, 50%,
and 61.8%. There are a few others but these are the most common. The
power of Fib at work. Corrective waves often retrace 38.25 or 50% or
61.8% of the impulse wave preceding it.
Another important use of the Fib sequence in market analysis is the function of time. We have found that the up and down waves of market prices tend to occur at time fib intervals. when viewed at a daily time scale, minor waves will often be at lengths of 3, 5, 8, 13, ... days. These minor waves can often be seen to add up to a fib number of days to create the larger waves that occur at 21, 34, 55, ... etc. day intervals. Note that this is not always exact (though it often is) but can be seen to occur within a day or 2 of a specific fib interval.
The purest, most accurate trading signals
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TheMarketTimers.com provides introductory information to
the techniques used for stock market timing. Trading stocks,
currencies, or any security
involves risk. The stock market timing techniques shown on this site can
help control the risks involved in trading. Though these stock market
timing and charting techniques are very helpful for some traders, they
require experience and knowledge of market behavior that comes with
practice. It is advised that traders use
risk management and set loss limits on every trade.
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