The Handbook of Technical Analysis + Test Bank_ The Practitioner\'s Comprehensive Guide to Technical Analysis ( PDFDrive )

Fibonacci Number and Ratio Analysis

10.23 Chapter summary

As we have seen, Fibonacci ratio price projections, retracements, extensions, and

expansions form an important part of any practitioner’s technical toolbox. We see

the power of applying Fibonacci ratios to the charts especially when we combine

price and time based Fibonacci ratio projections. Such confluences provide a more

effective means of gauging potential price reactions and reversals in the markets.

Chapter 10 Review Questions

1. Explain how you could potentially increase the reliability of Fibonacci fore-
   cast levels.


2. Describe the various probable Fibonacci ratio projection and expansion rela-
   tionships for determining the top of wave 5 in an Elliott wave pattern.


3. What is Constance Brown’s view on applying Fibonacci operations?


4. Explain how you would test the reliability of a forecasted Fibonacci level.


5. Explain how chart scaling affects Fibonacci applications.


6. In which markets, or under what scenarios, would Fibonacci forecasts be more
   reliable?


7. Describe how you would use oscillators to confirm Fibonacci level forecasts.


8. How would you apply Fibonacci analysis to price gaps?

reFereNCes

Boroden, Carolyn. 2008. Fibonacci Trading. New York: McGraw‐Hill.

Brown, Constance. 1999. Technical Analysis for the Trading Professional. New York:

McGraw‐Hill.

Frost, A. J., and Robert R. Prechter. 1999. Elliott Wave Principle. New York: John Wiley

& Sons.

Maclean, George. 2005. Fibonacci and Gann Applications in Financial Markets. Hoboken,

NJ: Wiley Trading Series.