Aug 14, 2015
The Academy of Financial Trading
Trading with the Golden Ratio
The Golden Ratio explained
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Risk Warning
The Golden Ratio
The Golden ratio ( 1: 1618) has been found in nature historically
Trading with the Golden Ratio – Fibonacci retracements
From art to biology it can be found everywhere – like the proportions of the Parthenon to the shape of the human body
Financial analysts began applying this to stock and bond pricing in the form of Fibonacci retracements
It is used to estimate the future support and resistance levels
The Golden Ratio explained
The Key Numbers – how to apply
We simply take the high point on a chart and the low point and draw a ling from the top to bottom
We then use the golden ratio to find the certain levels that the price is said obey from a support & resistance point of view
Let’s switch to a chart and take a detailed analysis of the same
The Golden Ratio explained
Trading with the Golden Ratio – Fibonacci retracements
The Conclusion…
Technical Analysis is a central tenet of a trader using Fibonacci levels
It attempts to gauge the future movement of an instrument based on the trader being sure its price will obey such levels
It has in a global sense become a self fulfilling prophecy as the collective mind of traders believes that it will fall/rise at these levels – so they sell or buy and then it actually does!
Fibonacci movements may be useful but are for shorter term opportunities – we want to move with the smart money and let winners run for as long as possible – with minimal administration
The Golden Ratio explained
Trading with the Golden Ratio – Fibonacci retracements
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