Fibonacci ratios are applied in the wave theory. By itself the fibonacci ratios are simple to understand. Incidentally Fibonacci , an italian by birth came out with this theory in the 12th century. The ratios are actually seen in every aspect of nature and creation. I will not go thru how you can see the fibonacci in each and every aspect of life(same you can google and you tube ) Suffice to say that herd thinking and reactions are all according to set rules in which fibonacci ratios and wave theory plays a big part.
The fibonacci ratios are applied to the wave structure and are very much an integral part of the wave theory. The mathematical series is simple enough 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987, 1597, 2584, 4181, 6765, 10946, 17711, 28657, 46368, 75025, 121393, 196418
The NEXT number is got by adding the previous two numbers.
NOW IF YOU DIVIDE ANY NUMBER BY THE PRECEDING ONE , THE RATIO IS VERY CLOSE TO 1.618. This is called the golden ratio and is applied very often in the wave theory.
APPLICATION OF FIBONACCI RATIOS
Derived from the golden ratio are sub ratios which are used again and again in the wave theory. These are
0.236, 38.2, 61.8, 123.6 , 138.2, and 161.8.
How to apply these ratios to the waves, is of great importance. We will learn the same after a practical exercise on putting retracements on the charts.