Nature's Law: Fibonacci Ratios and Market Analysis

The Magic Numbers from Pisa

The Fibonacci sequence (1, 1, 2, 3, 5, 8, 13, 21...) isn't just found in rabbit breeding or galaxy spirals; it is the mathematical skeleton of the Wave Principle.

The Golden Ratio 0.618

Dividing any number in the sequence by the next yields approx. 0.618; dividing by the previous yields 1.618. This forms the basis for key support and resistance levels.

Application in Markets

Retracement: Corrections often retrace 61.8% or 38.2% of the previous wave.

Multiples: Wave 3 is often 1.618 or 2.618 times the length of Wave 1. Wave 5 is frequently equal to Wave 1 or relates by a 0.618 factor.

These ratios provide objective targets rather than guesswork.