Friday, September 29, 2006

Fibonacci - Leonardo of Pisa not "Pisang"

I’m a great admirer of Gann, Elliot and Jesse Livermore. Noticed that most Gann & Elliot works were based on Fibonacci’s Golden Ratio. Here some background - Who the Heck is Fibonacci & the Mysterous Golden Ratio?

The Fibonacci number series and the Golden Ratio are two very important mathematical principles which occur repeatedly in nature, art, architecture and science. These principles have been noted to occur in everything from growth patterns of plants to the expanding spiral of the universe.

The mass movements of human pychology as represented by the financial markets, also subject to these laws of nature. While the financial market will not follow an exact fibonacci pattern all of the time, they will do so often enough that Fibonacci can be a very useful in trading.

Leonardo Fibonacci was a 13th century mathematician who through his writings in "LIBER ABACI" brought the modern world not only the Fibonacci number series, but also our present system of counting. This system using symbols 0,1,2,3,4,5,6,7,8,9 eventually replaced the traditional Roman numeral system throughout the world.

The principle of Golden Ratio refers of 0.618 in dividing a given space. Each number in the Fibo sequence (1,2,3,5,8,13,21,34,55,89) is related to the next number by a ratio 0.618. Each number in sequence is related to the previous number by a ratio of 1.618. Alternate numbers in the sequence are related by the ratios of 0.382 and 2.618. These ratios become more exact as the number sequence proceeds.

Fibonacci discovery of the number series is often attributed to his observations of the great pyramid of GIZEH. The pyramid is 5813 inches high (5-8-13 are all Fibo numbers). Futher the proportions of height to the edges of the pyramid are all in an exact 0.618 ratio. Lending itself to the measurement of time, the total length of the pyramid base is 36524 inches, which is exactly 100 times the length of the solar year.

MORE ON FIBONACCI (Check it out, very interesting):
- WIKIPEDIA
- Islamic Research Foundation International, Inc

FIBONACCI RELATIONSHIPS

Fibonacci Number Series:

1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987. . .

How to compute the Fibonacci series:

  • 1 + 1 = 2
  • 1 + 2 = 3
  • 2 + 3 = 5
  • 3 + 5 = 8
  • 5 + 8 = 13
  • 8 + 13 = 21
  • 13 + 21 = 34
  • 21 + 34 = 55
  • 34 + 55 = 89
  • 89 + 55 = 144
  • etc.
Ratios Of Adjacent Numbers In The Series (AKA Golden Section Ratio):

  • 89/144 = .618
  • 144/233 = .618
  • 144/89 = 1.618
  • 233/144 = 1.618
Ratios Of Alternate Numbers In The Series:

  • 89/233 = .382
  • 144/377 = .382
  • 233/89 = 2.618
  • 377/144 = 2.618

1 comment:

Virtual Office said...

"...great pyramid of GIZEH. The pyramid is 5813 inches high (5-8-13 are all Fibo numbers)"

Interesting read! I know very little about Fibonacci and the ratios...it makes you wonder what else there still is to be discovered. Even just by studying the pyramid of Gizeh.