Briefly explained: Fibonacci Retracement Level

What is a Fibonacci Retracement Level? This article will explain this analysis tool and explain its role in trading.

In yesterday's course analysis (and a few older ones), Fibonacci retracement levels were pointed out. But what are these and why should I care? This question I would like to pursue in this article and quasi explain from the ground up .

This mathematics should characterize the life of Fibonacci, and ultimately the whole of Europe: he was not the first, but one of the most important representatives of the Arabian system of payment and thus has a significant share in it Introduction to the Western world.

However, it is more important for this article that the so-called Fibonacci sequence

is named after it. It is defined as follows: Beginning with the first as well as the first and second numbers, each new number is defined as the sum of the last and the last. Thus, a sequence of numbers with this form is obtained: 1, 1, 2, 3, 5, 8, 13, 21 ...

This is not only a popular programming task in the computer science basic study that this sequence can describe a wide range of facts in the world. The so-called golden section, which is the basis for many processes of nature and aesthetics, is ultimately defined by the Fibonacci numbers. How does it work? If the quotient of a number and its predecessor is formed in the Fibonacci number sequence, a further series of numbers is obtained, which gradually approaches the value 1, 618. Similarly, if a number is separated by its successor, a number sequence is created that approaches 0, 618. This ratio between two stretch sections or other sizes is finally the golden section.