WHO IS FIBONACCI

Fibonacci’s full name is Leonardo Pisano Fibonacci, he was born in 1170 in Pisa, Italy, he is known for the introduction of wide range mathematical concepts known as the Arabic numbering system, the numbering sequence, square roots etc. what we know as our current numbering system was introduced by Fibonacci in one of his books which was titled ‘Liber Abaci’, this book was published in the year 1202.

If translated to English the term ‘Liber Abaci’ means ‘Book of Calculation’. It was in this book that the Hindu-Arabic place-valued decimal system was introduced into Europe alongside the Arabic numerals. Fibonacci was responsible for the introduction of the square root notation we still make use of today.

The man Fibonacci died in 1240 thereabout or 1250 as the year of his death was not certain.

THE GOLDEN RATIO

The golden ratio as popularly called has other names amongst which are the golden section, the golden mean or the divine proportion.

The golden ratio is also referred to as the irrational numbers when we come to mathematics and can be represented by ( 1 + √ 5 ) / 2, the golden ratio in mathematics is represented by ϕ or τ which are Greek letters, the value for golden ratio is approximately 1.618.

By way of definition the golden ratio is the ratio of a line that are divided into two diverse lengths, and it is divided in a manner that the ratio of the complete length to that of the longer length will be equal to the ratio of the longer length to that of the shorter length.

Mathematically the Golden ratio is
WHOLE LENGTH / LONGER LENGTH = LONGER LENGTH / SHORTER LENGTH

The Golden ration is the ration of a line that had been cut into two different lengths.

This is done in such a way that the ratio of the complete segment to the longer segment is equal to the ratio of the longer segment to the shorter segment. Simply put, Golden ratio is: whole segment/longer segment= longer segment/shorter segment.

HOW IS GOLDEN RATIO CALCULATED

We can say that two quantities x and y are in golden ratio if x + y / x = x / y = ϕ
To find the value of ϕ, the best method is to begin from the left fraction. By the simplification of the fraction and then substituting it into y/x = 1/ ϕ

x + y / x = x/x + y/x = 1 + y/x = 1/ ϕ
therefore we can say:

1+1/ ϕ = ϕ

If we multiply it by ϕ we will be having
. ϕ + 1 = ϕ2

The above can be rearranged to
ϕ2 - ϕ - 1 = 0

if we then make use of the quadratic formulae we would get:

1 + √ 5 / 2 = 1.618033 and 1 - √ 5 / 2 = - 0.618033

Since the golden ratio ϕ is the ratio that is between positive quantities then the value for the golden ratio will also be positive i.e 1.618033

HISTORY

The golden ratio was used for the first time in the year 1835 by a man named Martin Ohm, this can be seen in the second version of his book which was titled Die Reine Elementar-Mathematik.

Following history, the first time this term was used in English was in 1875 in the article of James Sulley’s that was centered on aesthetics in the 9th edition of the Britannica Encyclopedia, the symbol of the golden ratio was first used by Mark Barr, an American mathematician in the early 20th century as at the time of the commemoration of the sculptor from Greek, Phidias in 490-430 BC.

The symbol was named after him because according to historic claims he made extensive use of the golden ratio in his work. Another recognized figure was Fibonacci whose name was the first letter corresponds with the Greek letter phi.
In the geometry of regular pentagrams and pentagons, classical Greek mathematicians first study what we now call the golden ratio. The split of the line into 'extreme and middle ratio' (the golden section of the line) is significant.

According to one account, Hippasus of the 5th century BC found that there was not a whole or one fraction, shocking to Pythagorians, of golden ratio. The Euclid's Elements (c. 300 BC) offers a number and proofs of the Euclids Elements, and the earliest known definition follows: It is claimed that a straight line has been sliced in an extreme and middle ratio when the entire line is the larger and the smaller. Over the next millennia, the golden ratio was examined peripherally.

Abu kamil (c. 850–930), who utilized this ratio in related geometry issues, never associated with the number-set series names of him, in his geometric computations of pentagons and decagons, inspired that of Fibonacci (Pisa Leonardo) (c. 1170–1250). Abraham de Moivre, Daniel Bernoulli and Leonhard Euler, mathematicians of the 18th century, used the golden ratio based formula which identifies the figure of a Fibonacci number based on the sequence of the number; in 1843 Jacques Philippe Marie Binet, for whom it was referred to as the 'Binet Formulation,' rediscovered that figure.

First, Martin Ohm described the ratio in 1835 using the German name goldener Schnitt. The English word was coined in 1875 by James Sully. By 1910, the Greek letter Phi (φ) was used as the golden ratio sign by the mathematician Mark Barr. The initial letter of the Greek τομή ('cut' or 'segment') was also represented by tau (τ). Roger Penrose designed a penrose tile between 1973 and 1974, which was linked with the golden relationship both in the ratio of its two rhombic tile regions and in its relative frequency.

HOW IS FIBONACCI USED IN TRADINGVIEW

The first step is to sketch the two ends of resistance and support on two horizontal lines. In the ratios of 23.6 percent, 38.2 percent, 61.8 performance and 100 percent, the space between the drawn lines may therefore be split in four portions. These levels function as resistance and supports during price changes.

The following graph shows the illustration:

At point D and E there is an initial decline, at point F the price retraces back to touch 23.6% and at point A, B and C the price forms multiple advance supports between 23.6% and 61.8%

FIBONACCI LEVELS WITH A TIMEFRAME OF 4 HOURS FOR A PERIOD OF 48 HOURS AND IDENTIFYING THE POSSIBLE SUPPORT AND RESISTANCE LEVEL FOR THAT PERIOD

In the graph above, a strong price reversal following a resistance occurs throughout 24 hours at point A at 100% level. Following is the support in B, which brought the price to another barrier in D.
It might be pointed out that the opposition and support from B to E occurred at 23.6% to 61.8%.

For each of the two transactions, point F is the 24 hour meeting point. While A to E is the first 24-hour diagram, G to H is the second 24-hour diagram that results in a 48 hour BTC/USDT study.

FIBONACCI EXTENSION

Fibonacci extensions are a technique traders may use to set profitable objectives or estimate the extent to which the retracement price can be reached. Extension levels are also conceivable places where the reverse pricing can be achieved.

There is no formula for Fibonacci extensions. The trader picks three points when the indicator is applied to a chart. The lines are based on the proportion of that movement when the three spots have been picked.

The first selection is the start of a move, the second is the finish, and the third is the end of the retracing. The extensions assist to predict the upcoming pricing. These are values below 0 in the chart. They serve as a tool to set price goals or discover anticipated regions of support and resistance if the market goes to places outside Fibonacci's limits.

It might be observed that if the price advances in that way, it might go farther. There are hence conceivable interests for Fibonacci extensions.

CONCLUSION

A retracing method from Fibonacci has been utilized by traders for many years in their technical price research. This tool is used for trading in stock, forex and cryptocurrency. Although it does not provide a 100% price forecast, it has over time proved reliable. Fibonacci can be trusted for accuracy in the analyzation of charts.

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