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Fibonacci - Who Was He And How Could He Improve My Stock Trading
Profits?
By Chris Towland
The word
means a lot of things to a lot of different people. For mathematicians,
is an important number sequence. For some painters, sculptors,
and other visual artists,
is a principle theory of the arts. For traders, businessmen, economists
and the like,
is a system that can efficiently predict market trends. Yet, for
most of us,
sounds incredibly complex and something that we'd rather not discover.
But what exactly is Fibonacci? What does it mean and for what
is it used?
Fibonacci, which means son of Bonacci, is actually a nickname
used by the famous Italian mathematician and businessman Leonardo
Pisano. Bonacci, on the other hand, is the nickname of his father
and it means 'good natured' or 'simple'. While
was born in Italy, he spent most of his childhood years in Bugia
(now Bejaia), a Mediterranean port in Algeria where his father,
Guilielmo, worked as a consul for the merchants of Pisa. It is
in Bugia where he learned the Arabic numeral system, and later
as he traversed the rest of the Mediterranean world, he learned
more of the Arabic mathematical system and its practical uses.
In 1200,
ended his travels and returned to Europe. There he wrote a number
of books that disclosed the mathematical skills he had learned
in his Mediterranean travels. Among his works that were published
are the Practica Geometriae, Flos, Liber quadratorum, Di minor
guisa, and his commentary on Book X of Euclid's Elements; the
last two mentioned, unfortunately, are already lost. His Liber
quadratorum, or Book of Squares, is probably his most magnificent
book, but it was not his most popular work. His most popular work
was rather the Liber Abaci, his first book that was written in
1202 where he introduced to the Europeans the Arabic numerical
and mathematical system. In this book, he also taught the Europeans
how to use such mathematical system in accounting and in trading.
Most importantly, it is in the Liber Abaci where he introduced
the
numbers and sequence for which
he is best remembered today.
The
numbers, or sequence, was first used in Liber Abaci as a solution
to a problem regarding the ideal population of rabbits. It is
a recursive number sequence that starts with 0 and 1, and the
succeeding numbers being the sum of the two numbers preceding
it. This number sequence efficiently predicted the ideal growth
of the population of rabbits. Later, mathematicians and scientist
discovered that the
number sequence has a lot of other uses aside from just predicting
the population growth of rabbits. They have discovered that
the
sequence, in fact, occurs in many various patterns of nature.
What started out as a way of counting rabbits has now found
a large number of other uses and applications. And as our present
day scholars continue to study about the
sequence, more and more uses for it continue to be discovered.
Today, there are a variety of applications where the
sequence, and its derivatives, are being used. It has found
use in many computer programs. A ratio derived from the
sequence, called the Golden Mean, has been considered by ancient
Greeks to be the ideal aesthetic ratio and is now being widely
used by many visual artists in their works. The
trading system, which is an efficient way of predicting future
trends in the world financial markets, has also become popular
to expert traders and aspiring traders as well.
Who in the past might have known that such a simple number sequence
like the
numbers would have a great impact on a lot of things today?
Maybe, not even
himself.
About the Author: To learn more about how you can use
to accurately predict major stock market turning points, visit
Trading at http://www.fibonacci-trading.com
Forex trading uses something that is called
ratios, and these are used a lot. These ratios are just a fraction
of the studies done on Fibonacci. Leonardo
was an Italian mathematician who became famous for discovering
a simple number series that created ratios which described the
proportions of things that exist in the universe. This series
of numbers starts with two ones, and then the next number is the
sum of the two numbers that precede it. These ratios are used
in Forex trading, and they make up a large percentage of subjects
in Forex. Leonardo
was called the greatest mathematician of the Middle Ages, as he
contributed greatly to the developement of numbers, and the algebra
concept was based on his work in math.
Fibonacci retracement levels are used by Forex traders as support
and resistance levels. Hundreds of thousands of Forex traders
see the same support and resistance levels, and they place sell
and buy orders on the levels to place stops or enter trades. The
extension levels are used by Forex traders as profit taking levels.
Almost all software that is used for charting Forex includes tools
for both
extension level and retracement level. However, in order for you
to apply the
levels to your tradings, it is imperative that you identify the
Swing High and Swing Low points.
Leonardo
was famous for mathematics, and his mathematics are famous in
Forex trading.
There
are numerous
principles that are applied when dealing with the Forex trading
market, and using these principals can greatly improve your ability
to make an informed decision when you are trading on the forex
market.
ratios are applied to targets, as well as numerous other factors
in Forex trading.
If Leonardo
had not been the mathematical genius that he was, Forex trading
might not exist today and the world would be a completely different
place.
numbers and ratios are an important part of Forex trading and
analysis.
retracement level and
extension level are a tool used by traders in the Forex market
to help them control the risks and profits of trading in the Forex
market. Leonardo
has made a very important contribution to the world of market
trading, and his contribution is used in the Forex market on a
daily basis by hundreds of thousands of traders.
