﻿ Fibonacci Calculator | FXCM Australia

# Fibonacci Calculator

Fibonacci numbers, also referred to as the Fibonacci sequence, have been observed for hundreds of years by statisticians the world over. First quantified in the early 13th century by mathematician Leonardo Pisano, Fibonacci numbers are utilised in everything from architecture to weather forecasting. They are a mainstay of forex technical analysis as well, and they're readily applied to the markets on a daily basis.

The Fibonacci sequence features relative simplicity, yet advanced serviceability. The basic progression is as follows: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, on to infinity. Each number in the sequence is the sum of the previous two integers, thus creating a unique proportionality. This ongoing relationship between the values is represented in statistics as the Greek letter Phi (φ), known as the golden ratio (1.1618034).

Of the many aspects local to the sequence, the golden ratio is coveted by technical traders. It plays an elemental role in the calculation of indicators such as Fibonacci retracements and extensions. Taking advantage of the Fibonacci calculator is a great way to quickly and routinely maximise the utility of these powerful trading tools.

## Advanced Analytics: The Fibonacci Calculator

In the arena of active trading, Fibonacci retracements/extensions are popular among forex market participants. An inherent flexibility ensures that they're readily applied to nearly any strategy, specifically trends and reversals. Trade management is another area where Fibonacci retracements/extensions excel by helping with the placement of stop losses and profit targets.

Fibonacci retracements/extensions are especially useful in trend identification. They are frequently referenced by traders to determine the validity, size and potential exhaustion points of a prevailing trend. That is the beauty of the Fibonacci calculator―it takes the work out of applying retracements/extensions to any trend, bullish or bearish. All one needs is a designated high, low, and custom pullback value, and the Fibonacci calculator does the rest.

Assume that the EUR/USD is in the midst of a strong intraday uptrend, with a defined high (1.1459), low (1.1316) and custom (1.1385) value. Given only those price points as reference, the Fibonacci calculator automatically produces an entire array of distinct levels:

Retracements Extensions
Uptrend 0% (b) 1.1459 261.8% 1.1759
High (b): 1.1459 23.6% 1.1425 200% 1.1671
Low (a): 1.1316 38.2% 1.1404 161.8% 1.1616
Custom (c): 1.1385 50% 1.1387 138.2% 1.1583
61.8% 1.1371 100% 1.1528
76.4% 1.1350 61.8% 1.1473
100% (a) 1.1316 50% 1.1457
138.2% 1.1261 38.2% 1.1440
23.6% 1.1419
Retracements Extensions
Downtrend 138.2% 1.1514 23.6% 1.1351
High (a): 1.1459 100% (a) 1.1459 38.2% 1.1330
Low (b): 1.1316 76.4% 1.1425 50% 1.1314
Custom (c): 1.1385 61.8% 1.1404 61.8% 1.1297
50% 1.1387 100% 1.1242
38.2% 1.1371 138.2% 1.1187
23.6% 1.1350 161.8% 1.1154
0% (b) 1.1316 200% 1.1099
261.8% 1.1011

Computing retracements and extensions by hand is a challenging task to complete successfully in a live market environment. Not to worry, though, because the Fibonacci calculator rapidly and precisely generates the desired levels regardless of currency pair, volatility or trend direction.

#### FXCM Research Team

FXCM Research Team consists of a number of FXCM's Market and Product Specialists.

Articles published by FXCM Research Team generally have numerous contributors and aim to provide general Educational and Informative content on Market News and Products.

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Disclosure

Hypothetical/Simulated Performance: These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown. Simulated or hypothetical trading programs are generally designed with the benefit of hindsight, do not involve financial risk, and possess other factors which can adversely affect actual trading results.