Fibonacci Numbers/Lines

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DEFINITION of 'Fibonacci Numbers/Lines'

Fibonacci numbers/lines were discovered by Leonardo Fibonacci, who was an Italian mathematician born in the 12th century. These 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.

BREAKING DOWN '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.