It works best on all markets and time frames.
The fan is drawn by placing a trend line between two points usually a trough and opposing peak. Next, an invisible vertical line is drawn through the second reference point. Three trend lines are then drawn from the first extreme point so they pass through the secrets of internet earning sites vertical line at the Fibonacci levels of Thousands of years ago, mathematicians discovered that a certain number kept appearing throughout the natural world.
It was the ratio describing how flower petals grew around their central stem, how a snail's shell swirled around its origin and how a galaxy extended from its core. More importantly for the financial community, this ratio described how consecutive numbers related to each other. This "golden ratio" of.
The Fibonacci sequence starts like this: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89,The ratio of any two consecutive numbers starts out by oscillating around.
So what does this have to do with trading? Actually, Fibonacci numbers are really one aspect of trading with Elliott Waves and Gann Angles but those are topics for other Fibonacci fan and trend lines of "Tips. These retracements often reclaim constant percentages of the original trend's move and can be predicted with good accuracy by the Fibonacci sequence.
The ratios of consecutive numbers at the start of the sequence are 1. All of these are Fibonacci levels.
The one and two thirds levels are really approximations of the Fibonacci ratio As you can see, Fibonacci levels are simply refined versions of what traders have been using for years. Placing your cursor where you wish to start the trend line, left-click and drag over the chart, releasing your mouse where the trend line should end.