Mta uae forex_fibs_final_copy_nov25_12

PRACTICAL APPLICATIONS OF
FIBONACCI ANALYSIS IN THE
FOREX MARKET

Market Technicians Association
UAE Chapter Meeting
November 25, 2012

Presenter: Bruce Powers

Presentation summary
 Guide to Fibonacci ratios
 Fibonacci measurements
 Retracements

 Projections

 Extensions

 Practical applications of Fibonacci ratio analysis
 GBP/USD - historical walk forward
 EUR/USD – recent and current analysis

 USD/JPY – current analysis

Copyright, Bruce Powers, 2012

Liber Abaci (The Book of
Calculation), published in  Used to Identify
1202. English translation
totals 672 pages. potential support and
Introduced Europe to
modern arithmetic resistance levels based
on past trends.
 Based on the
mathematical discoveries
"Fibonacci, also
of Leonardo Pisano—
known as Leonardo also known as Fibonacci.
of Pisa,
19th century statue  Discovered sequence of
of Fibonacci in
Camposanto, Pisa.
numbers that now bears his
name: the Fibonacci
sequence.


Fibonacci Summation Series
Number series:
1 1 2 3 5 8 13 21 34 55 89 144 233 377 610 987
1.0000 2.0000 1.5000 1.6667 1.6000 1.6250 1.6154 1.6190 1.6176 1.6182 1.6180 1.6181 1.6180 1.6180 1.6180
0.5000 0.6667 0.6000 0.6250 0.6154 0.6190 0.6176 0.6182 0.6180 0.6181 0.6180 0.6180 0.6180 0.6180

Start with any two numbers:
29 58 87 145 232 377 609 986 1,595 2,581 4,176 6,757 10,933 17,690 28,623 46,313
1.6250 1.6154 1.6190 1.6176 1.6182 1.6180 1.6181 1.6180 1.6180 1.6180 1.6180
0.6190 0.6176 0.6182 0.6180 0.6181 0.6180 0.6180 0.6180 0.6180 0.6180

1.618 = Phi / Golden Mean / Divine Proportion


Golden ratio

“Imagine if you cut a line into two segments, one big, and
one large. The size of the pieces is "the golden ratio" if the
ratio of the big piece to the little piece is the same as the
ratio of the whole line to the big piece.”

1.618 = Phi / Golden
Mean / Divine
Proportion


Fibonacci ratios for market analysis
 Primary Ratios  Secondary Ratios
0.382 0.236
0.50 0.486
0.618 0.886 (SqRt 0.786)
0.786 (SqRt 0.618)
1.13
1.0
2.236
1.272 (SqRt 1.618)
1.618 3.14 (Pi)
2.0 4.236
2.618
3.618

Can be applied Brucetime and price
Copyright,
to Powers, 2012

Fibonacci measurements
Retracements Extensions Projections
A C

38.2% B
50%
100%
61.8% D 100%
127.2%
78.6% 127.2%
161.8% 161.8%

161.8%
78.6% 127.2%
D 100%
161.8%
61.8%
127.2% B
50%
100%
38.2%

C
A

USD/JPY - Retracements


USD/JPY - Extensions


USD/JPY - Projections

A
C
D

B B

D C

A


Value of Fibonacci analysis
 Helps determine when odds move in your favour
 Entries

 Protective Stops
 Targets

 A guide only - to go along with other analysis
 Reversal confirmation needed
 Non-random nature of the market
 Price expands then contracts


Price Cluster - Confluence
 Three or more price relationships identifying the
same area of price
 Confirmation
 Support/resistance

 Moving averages
 21ema, 55ema, 200ema
 Chart patterns
 Oscillators

 Be aware for possible Reversal

GBP/USD walk forward
10-year Weekly



w
x



Tight stop

Confluence: 3 retracements
& 1 extension (AB=CD)



Bear Flag


AUD/USD Daily


EUR/USD Daily


EUR/USD Weekly

Inverse H&S


EUR/USD Weekly

H&S target =
approx. 1.4312
AB=CD, 100%
1.3785 D

B

C

A


Targets : AB=CD

D

B

C

A


EUR/USD 120min.


USD/JPY Daily

H&S target = 84.1620


USD/JPY Daily


Thank You

Practical applications of
Fibonacci analysis in the Forex
market

Contact:
Bruce Powers, CMT
brpowers@hotmail.com


Reference
 Carolyn Boroden, Fibonacci Queen
 Larry Pesavento, The Trading Tutor
 Jason Stapleton, Triple Threat Trading
 Ross Beck, The Gartley Trading Method
 Scott Carney, HarmonicTrading
 Suri Duddella, (ABC patterns)


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