The Golden Ratio -

Fibonacci in the Financial Markets

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The information (which was solely developed as a visual aid to support and
enhance the matters presented at the seminar) has been provided by the
presenter in good faith and every reasonable attempt has been taken to ensure
the information contained in the presentation is accurate as at the date of the
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 Objective

To be able to have a basic understanding of Fibonacci Retracement and

how to apply it properly.
Why Fibonacci?

Fibonacci Tool is a leading indicator, which means you will have an idea of
the support and resistance of the price before it even get there.
A Fibonacci trader is able to get the most part of the move from the moment
of breakout.
With the Fibonacci tool, the trader can, on many occasions, exit almost
exactly at the end of the move.
 Origin of
Fibonacci

Leonardo Pisano Bigollo (born around 1170 in Italy), also known as

Leonardo Fibonacci, introduced the Fibonacci sequence to the western
world in his book Liber Abaci.
The Fibonacci sequence is present in many different areas, such as
mathematics, nature (spirals of shells or tree branches) and, of course, in
trading
Fibonacci numbers are the sequence of numbers starting as follows: 0, 1, 1,
2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 337, 610, 987, where each
number is the sum of the two prior numbers
The Fibonacci
Ratio

Based on the sequence, we can calculate the ratio, or retracement level.

The Fibonacci ratio is counted by dividing a number by the number that
follows it in the sequence, and vice versa.

5/8 = 0.62, 8/5= 1.62, 5/13=0.38, 13/5= 2.62

8/13=0.61, 13/8=1.62, 8/21=0.38, 21/8=2.62
How to Draw
Fibonacci
Retracement

Drawing the retracement is as easy as writing ABCD, however, there are a few
points that needs to be observed to maintain a consistent reading, and prevent
misanalysis that could lead to a costly mistake

1. Dont mix Fibonacci Reference points

2. Dont ignore long term trends
3. Dont rely on Fibonacci alone
4. Dont use Fibonacci over short intervals
Retracement
Levels

Try to use the standard levels. Over time, when you gain more experience,
you will decide which are the most important ones and which ones you prefer
to use.

The standard levels that i recommend to use are the following:

38.2%
50%
61.8%
161.8
You can add 78.6%, 88.6%, 113% and 127% to fully complete the sequence.
 The 38.2%

the most important level that should be watched

decides whether the reversal will be strong or not.
a breakout would increase the conviction of a trend reversal, however,
confirmation is required by retesting it as support and vice versa.
no retest as support would mean a strong reversal is underway.
failure to close above it on a reversal increases the risk of further
breakdown.

requires volume for confirmation

CHP
FNI
IMI
The Golden
Ratio

serves as the confirmation of the reversal after breaking 38.2% level,

however, confirmation is required by retesting it as support and vice versa.
no retest as support would mean a strong reversal is underway.
requires volume for confirmation
VITA
Confluence &
Convergence

Confluence and Convergence could give a trader a likely area that could
act as a strong support or resistance
Convergence happens when you draw, from the same timeframe, multiple
Fibonacci retracement lines on multiple swings where some levels ended
up lying close to each other
Confluence happens when multiple fibonacci levels from different
timeframe, or different indicator, i.e. MAs, Ichimoku, etc, on the same
timeframe merged or crossed on a certain price level
Convergence
Confluence
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