Fibonacci Calculator
What is the Fibonacci Sequence?
Discovered many centuries ago in 1202, the Fibonacci sequence is a series of numbers where each number is the sum of the two preceding ones, starting from 0 and 1.
The sequence begins as 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, and so on, where the first two numbers (0 and 1) add to make 1, then the last two numbers (1 and 1) add to make to, and so on until infinity.
The actual Fibonacci sequence can be defined by the recursive formula:
F(n)=F(n−1)+F(n−2)F(n)=F(n−1)+F(n−2)
where F(0)=0F(0)=0 and F(1)=1F(1)=1.
Aside from being an interesting math experiment, the Fibonacci is important to life and to trading because the ratio of consecutive Fibonacci numbers converges to the golden ratio (approximately 1.618).
How can Fibonacci help you in Trading?
In trading, Fibonacci retracement levels are horizontal lines drawn on a chart at key Fibonacci ratios such as 23.6%, 38.2%, 50%, 61.8%, and 100%. These ratio levels typically indicate potential support and resistance levels and can help traders identify potential reversal points in the price of a financial instrument or asset.
For example, imagine a stock’s price is in an uptrend, and then it begins to fall. Using the Fibonacci retracement levels, traders can identify potential support levels where the price could meet support and bounce back up.
The same is true in reverse, with Fibonacci retracement levels also showing potential resistance levels.
How to use the Fibonacci calculator
Of course, it’s not always obvious where the Fibonacci levels are, and it can be difficult to quickly calculate and apply them manually when trading.
This is where our Fibonacci calculator comes in, allowing you to simply input your data and receive the exact Fibonacci levels relating to your chart.
Simply enter a high value, a low value (or a custom value), and then specify if you are examining an uptrend or a downtrend. All you need to do then is click “calculate”, and you will instantly receive 8 retirement values and 6 extension values that you can easily integrate into your forex trading system.