Fibonacci numbers are named after the Italian mathematician Leonardo of Pisa who was later known as Fibonacci, which grew from the Italian “son of Bonacii” probably meaning son of a mathematician.
In his 1202 book Liber Abaci, Fibonacci introduced the sequence to Western European mathematics. Although the sequence had been described earlier in Indian mathematics, as early as 200 BC.
Fibonacci numbers form an integer sequence called the Fibonacci sequence, such that each number is the sum of the two preceding ones, starting from the two numbers 0 and 1. Under older definitions the value 0 is omitted so that the sequence starts with 1, 1 and continues.
The sequence starts with 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, ad infinitum adding the preceding two numbers together to form the next: 1 + 1 = 2, 1 + 2 = 3, 2 + 3 = 5 etc.
While the sequence is meaningful when counting rabbit birth rates or waves in the ocean, it is actually the ratios of the succeeding numbers that we use in trading.
Dividing each successive number in the sequence by the preceding number yields a familiar number, which converges quickly to 1.618. The first few numbers are not convergent, but when you get down to 13 the ratio is steady at 1.618.
Dividing each successive number in the sequence by the third preceding number yields a familiar number, which converges quickly to 0.382, the 38.2% retracement . Again, the first few numbers are not convergent, but when you get down 13 rows in your spreadsheet, it is steady at 0382.
Here, next, is a List of Fibonacci Numbers for your reference.
0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987, 1597, 2584, 4181, 675, 10946, 17711 ...
SEE ALSO: Elliott Waves
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