The Golden Ratio has been the subject of the Artists, Architects and Mathematicians for centuries. From Market to Biology the Golden ratio can be found everywhere like movement of stock prices. Financial analysts found use for this golden ratio, 1:1.618 in predicting bond and stock prices. One of the more popular applications of the golden mean is the Fibonacci retracement. It can be calculated by taking the high and low point of a chart and drawing 5 horizontal lines. The first at 100%, the high point and second at 61.8%, third at 50%, fourth at 38.2% and last at 0%. After a significant price movement up or down, the new support or resistance levels are frequently are at or near these lines. While Fibonacci retracement help explain prior movements many traders see the Fibonacci arc as an important way to predict future activity.
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Trading with the Golden Ratio
July 7, 2015 at 12:35
by K. Prabhu
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