Exness Forex Broker Review: Is It Reliable? Pros and Cons

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Investment and Financial Freedom > Exness Forex Broker Review: Is It Reliable? Pros and Cons
24/01/2025 15:00 182

Fibonacci: A magical sequence of numbers found in both nature and investment. Fibonacci is a sequence of numbers where each number is the sum of the two preceding ones, starting from 0 and 1, such as 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, ... This sequence is named after Leonardo Fibonacci, an Italian mathematician who discovered and popularized it in the 13th century.

History

The story of the Fibonacci sequence began with a mathematical problem related to the population growth of rabbits. Fibonacci observed the pattern of rabbit population growth and found that the number of rabbits in each generation corresponded to the sequence he discovered.

Golden Ratio

Interestingly, when you divide a Fibonacci number by the number that follows it, the result approaches a constant called the Golden Ratio, which is approximately 1.618. The Golden Ratio is commonly found in nature, such as in seashells, flowers, galaxies, and even the human body.

Applications

The Fibonacci sequence and the Golden Ratio are applied in various fields, including art, science, and investment.

• Art and Design: Many artists and designers use the principles of Fibonacci and the Golden Ratio in their creations to achieve natural balance and beauty.
• Science: Scientists use the Fibonacci sequence to study natural phenomena such as plant growth, planetary motion, and molecular structure.
• Investment: Investors use the Fibonacci sequence in technical analysis to forecast asset price trends, relying on Fibonacci retracement levels, which are support and resistance lines calculated from the Golden Ratio.

Using the Fibonacci Sequence in Investment

• Fibonacci Retracement: A tool used to find price reversal points by drawing a line connecting the highest and lowest prices. The segment between these two points is then divided into proportions according to the Fibonacci sequence, such as 23.6%, 38.2%, 50%, 61.8%, and 100%. These levels represent the price levels at which the price is expected to reverse.
• Fibonacci Extension: Used to forecast potential price targets after the price breaks through resistance or support.
• Fibonacci Fan: A trendline drawn from the starting point with angles corresponding to Fibonacci levels.

Note: The Fibonacci sequence is just one tool for technical analysis. It does not guarantee investment returns. It should be used in conjunction with other analytical tools and fundamental factors.

Summary: The Fibonacci sequence is an interesting mathematical phenomenon with applications in many fields, including investment. Understanding the principles of Fibonacci can provide investors with more tools for market analysis.

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