$BTC 🧠 Article 8
Fibonacci – Part 1: The Golden Ratio and Its Role in Markets
(From John Murphy’s Technical Analysis)
Fibonacci theory is based on a sequence of numbers introduced by Italian mathematician Leonardo Fibonacci:
0, 1, 1, 2, 3, 5, 8, 13, 21...
Each number is the sum of the two preceding ones.
🔸 The key to its use in trading lies in the Golden Ratio – 61.8%, which results from dividing a number in the sequence by the one that follows it.
📊 In technical analysis, prices are believed to move in natural cycles, and Fibonacci ratios help identify areas where corrections or reversals may occur.
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✅ Commonly Used Fibonacci Ratios:
23.6%
38.2%
50% (not a Fibonacci ratio but widely watched)
61.8%
78.6%
These levels act as psychological zones where price often reacts.
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📌 Next article: How to apply Fibonacci tools like retracement, extension, and expansion in real market scenarios.
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🔍 This is educational content, not financial advice. Always think for yourself and trade wisely.