1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, ...

The other interesting relationship of this number sequence is that if we take the ratio of two successive numbers in the Fibonacci series (that is, we divide each number by the number after it in the sequence) we will move towards a particular constant value. That value is 0.6180345 which has been referred to as “the golden ratio�. If you also calculate the ratios using alternate numbers in the Fibonacci series (that is, do the same calculation but skip over a number) the resulting ratios approaches 0.38196.

From here on, skipping the numbers by going in both directions we get infinitive number of Fibonacci ratios, but only handful of them have found application in modern markets:

0.236, 0.382, 0.618, 1.000, 1.618, 2.618, 4.236, 6.854, 11.090, 17.944

Many technicians use Fibonacci numbers in their Technical Analysis when trying to determine support and resistance, and commonly use 38.2%, 50%, 61.8% retracements. Commonly thought, a .382 retracement from a trend move will tend to imply a continuation of the trend. A .618 retracement implies that a trend change may be in the making. Many such rules have been adopted by technicians.

It cannot be stressed strongly enough that Fibonacci principles is not just a numbers game; it is the most important mathematical representation of natural phenomena ever discovered. To appreciate the great relevance of the Fibonacci ratio as a natural constant, one need only visit The Fibonacci Numbers and Golden section in Nature and discover a particular natural law.

mGlider will show you that this nature phenomena has its presence in the modern market and how to understand and capitalize on it.