Fibonacci Numbers/Lines

AAA

DEFINITION of 'Fibonacci Numbers/Lines'

Leonardo Fibonacci was an Italian mathematician born in the 12th century. He is known to have discovered the "Fibonacci numbers," which are a sequence of numbers where each successive number is the sum of the two previous numbers.

e.g. 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc.

These numbers possess a number of interrelationships, such as the fact that any given number is approximately 1.618 times the preceding number.

INVESTOPEDIA EXPLAINS 'Fibonacci Numbers/Lines'

Interpretation of the Fibonacci numbers in technical analysis anticipates changes in trends as prices tend to be near lines created by the Fibonacci studies. The four popular Fibonacci studies are arcs, fans, retracements, and time zones.

RELATED TERMS
  1. Indicator

    Statistics used to measure current conditions as well as to forecast ...
  2. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  3. Fibonacci Retracement

    A term used in technical analysis that refers to areas of support ...
  4. Fibonacci Extensions

    Levels used in Fibonacci retracement to forecast areas of support ...
  5. Premium to Surplus Ratio

    Net premiums written divided by policyholders’ surplus. The premium ...
  6. Current Liquidity

    The total amount of cash and unaffiliated holdings compared to ...
Related Articles
  1. Trading Strategies

    How do I build a profitable strategy when spotting a Fractal pattern?

    Read about some common and simple trading strategies to employ after spotting a fractal pattern, and learn which systems are best suited for fractal analysis.
  2. Active Trading

    Fibonacci And The Golden Ratio

    Discover how this amazing ratio, revealed in countless proportions throughout nature, applies to the financial markets.
  3. Active Trading

    3 Technical Tools To Improve Your Trading

    Find out how volume, the Aroon indicator and Fibonacci numbers can improve your profits.
  4. Trading Systems & Software

    High-Tech Fibonacci

    Fibonacci developed this system in the Middle Ages. See how it can provide accuracy without sacrificing readability.
  5. Options & Futures

    Make Money With The Fibonacci ABC Pattern

    We break down this indicator into simple, easy-to-understand pieces so you can profit.
  6. Active Trading

    Taking The Magic Out Of Fibonacci Numbers

    Uncover the history and logic behind this popular trading tool.
  7. Trading Strategies

    How are Marubozo patterns interpreted by analysts and traders?

    Dig deeper into the Marubozo candlestick pattern, when the daily trading of a security never exits the range between opening and closing prices.
  8. Trading Strategies

    What is a common strategy traders implement when using the Mass Index?

    Learn about the mass index technical indicator and the common market reversal trading strategy that is designed to be utilized with it.
  9. Trading Strategies

    How are Donchian channels used when building trading strategies?

    Discover how some traders use the Donchian channel method of trend trading, and why Donchian channels work best with a complementary indicator.
  10. Technical Indicators

    What are common trading strategies when identifying divergence of indicators on a security?

    Learn some of the principle strategies traders can employ after spotting a divergence between technical indicators on a price chart.

You May Also Like

Hot Definitions
  1. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  2. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  3. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  4. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
  5. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
  6. Law Of Supply And Demand

    A theory explaining the interaction between the supply of a resource and the demand for that resource. The law of supply ...
Trading Center