Fibonacci... it's a technical tool that can make you rich.

Posted on by The INO.com Team

Fibonacci... it's a technical tool that can make you rich.

You may have heard about Fibonacci, the man who discovered a set of numbers who that have a major affect on the market. So who is this Fibonacci fellow, and why are his findings so important in the market place?

The mathematical findings by this thirteenth century Italian man has yielded a useful technical analysis tool which is used in technical analysis and by scientists in a large array of fields.

Born Leonardo of Piza, he is better known in the trading community as Fibonacci. Fibonacci's best known work is Liber Abaci which is generally credited as having introduced the Arabic number system which we use today.

Fibonacci introduced a number sequence in Liber Abaci which is said to be a reflection of human nature. The series is as follows: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144 and on to infinity. The series is derived by adding each number to the previous. For example, 1+1=2 , 2+1=3, 3+2=5, 5+3=8, 8+5=13, and so on.

I use the Fibonacci series mainly for retracements (see today's video) and to show me where support and resistance might come into the market. I also use this tool to enter or add onto a position.
In my new video, I show you these exact retracements and how they affected the market at that time.

There is no need to register for this video and of course you can watch it with our compliments today.

Enjoy the video and please give us your feedback on this blog.

Best,

Adam Hewison

President, INO.com
Co-creator, MarketClub

16 thoughts on “Fibonacci... it's a technical tool that can make you rich.”

  1. Very interesting video. Fibonacci numbers have been fascinating to me and I would love to more videos on that.

  2. Hemant,

    At thank you for your nice comments, and thank you for taking a trial to MarketClub.

    MarketClub and our trade triangle technology are very, very good, however nothing is perfect in the world of trading and you will have trades that don't work out.

    But I can say with a lot of confidence, that MarketClub will help you in the markets, and help you make money if you follow the rules we lay down in many of our videos.

    All the best,
    Adam

  3. Adam,

    I happen to see some of your videos today -

    1) GBP vs USD on the market toolbox live.
    2) The AAPL and the fibonacci series video.

    You know I have heard about the fibonacci series application in technical analysis alot but never got such detailed and clear explanation anywhere. I m infact thinking of using your trade triangle technology on a trial basis. I know nothing is perfect but I hope this trail will help me in trading better and in more focused manner with well defined entry and exit strategies.

    Thanks,

    Hemant

  4. Jun,

    Thank you for your feedback. The rally has certainly taken a lot of people by surprise with its strength and its ability to brush off negative news.

    The level that we're looking at an S&P 500 is the 943 area. if that area is taken out then we want to be on the long side of the market. At the moment our trade triangles are in conflict meaning you should be on the sidelines until such time that this conflict is settled.

    The 150 day moving average indicator is quite effective and obviously it is a tool to use for divining the trend.

    Once again thank you for your valuable contribution to this blog.

    All the best,
    Adam

  5. adam,

    i really enjoy your trading videos. i know you have a target of 500 for the s&p and you did a recent video anticipating the third down leg of the elliot wave originating at the 2007 high. i went back through my technical analysis primers and rediscovered the 150-day simple moving average indicator for bear to bull market reversals and found that the inflection point in the slope of that sma is a pretty reliable indicator of the reversal. then i realized that today minus 150 days takes us to the beginning of the waterfall declines, and that each passing day, pre-crash prices are coming off the average. unless the market begins severe declines almost immediately, it stands to reason that that average will flatten out very shortly, indicating a bear to bull market reversal.

    you didn't give a time frame for the final leg down to commence, so i was wondering if what i just cobbled together from the 150day sma adds a timeframe to your analysis, which is that the market must begin the final leg down within a week or so to prevent a bull market reversal.

    thanks! great stuff.

  6. Joe,

    Thank you feedback in for your observations.

    We always welcome well thought out comments.

    All the best,
    Adam

  7. Excellent Adam, you have a very calming voice which tends to put seasoned traders and new babies at ease during these nerve racking times. I did notice that RSI and MACD are showing a reverse negative. Very simply stated a reverse negative is whereby an indicator like RSI makes a higher high, but an index like the DOW makes a lower high indicating further downside action.

    Thanks
    Joe O'Brien

  10. Adam, thanks so much for this video. It, as well as all the others you put together, are very helpful.

  11. Hey Adam,

    I enjoy your comments and videos.

    Recently you used the Fibonacci tool in a video. I was confused about why you chose a certain starting point to begin the drawing. It seems arbitrary from my perspective. Maybe you can explain in the future why a top or bottom in a good starting point for a Fibonacci analysis.

    thanks!

    1. Caroline,

      When using the Fibonacci tool you want to measure from the most recent high to the lowest low.

      Now some of this is just pure interpretation as to what the highest high is and what the lowest low is. After awhile you intuitively see this and you know that the market should pullback or should rally depending which way the trend is. Using the Fibonacci tool can definitely help you see where a market should find support or resistance.

      This tool is often misinterpreted and in my opinion underrated by most of the nonprofessional trading community.

      All the best,
      Adam

  12. Hi Adam,

    Very helpful and informative video about Fibonacci tool.
    Thanks for taking time out and putting it together.

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