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In finance, Fibonacci retracement is a method of technical analysis for determining support and resistance levels. [1] It is named after the Fibonacci sequence of numbers, [ 1 ] whose ratios provide price levels to which markets tend to retrace a portion of a move, before a trend continues in the original direction.
A Fibonacci prime is a Fibonacci number that is prime. The first few are: [47] 2, 3, 5, 13, 89, 233, 1597, 28657, 514229, ... Fibonacci primes with thousands of digits have been found, but it is not known whether there are infinitely many. [48] F kn is divisible by F n, so, apart from F 4 = 3, any Fibonacci prime must have a prime index.
The n-Fibonacci constant is the ratio toward which adjacent -Fibonacci numbers tend; it is also called the n th metallic mean, and it is the only positive root of =. For example, the case of n = 1 {\displaystyle n=1} is 1 + 5 2 {\displaystyle {\frac {1+{\sqrt {5}}}{2}}} , or the golden ratio , and the case of n = 2 {\displaystyle n=2} is 1 + 2 ...
For generalized Fibonacci sequences (satisfying the same recurrence relation, but with other initial values, e.g. the Lucas numbers) the number of occurrences of 0 per cycle is 0, 1, 2, or 4. The ratio of the Pisano period of n and the number of zeros modulo n in the cycle gives the rank of apparition or Fibonacci entry point of n.
A pivot point and the associated support and resistance levels are often turning points for the direction of price movement in a market. [ 1 ] [ page needed ] In an up-trending market, the pivot point and the resistance levels may represent a ceiling level in price above which the uptrend is no longer sustainable and a reversal may occur.
Cassini's formula was discovered in 1680 by Giovanni Domenico Cassini, then director of the Paris Observatory, and independently proven by Robert Simson (1753). [1] However Johannes Kepler presumably knew the identity already in 1608.
Some traders believe in using pivot point calculations. [7] The more often a support/resistance level is "tested" (touched and bounced off by price), the more significance is given to that specific level. [8] If a price breaks past a support level, that support level often becomes a new resistance level.
In this section we shall use the Fibonacci Box in place of the primitive triple it represents. An infinite ternary tree containing all primitive Pythagorean triples/Fibonacci Boxes can be constructed by the following procedure. [10] Consider a Fibonacci Box containing two, odd, coprime integers x and y in the right-hand column.