Fibonacci Trading Strategy

Nabila A. Azzam () and Roque A. Batulan ()
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Nabila A. Azzam: Higher Colleges of Technology
Roque A. Batulan: Higher Colleges of Technology

Chapter Chapter 21 in Research on Islamic Business Concepts, 2023, pp 347-356 from Springer

Abstract: Abstract Leonardo Pisano Pogolo, an Italian mathematician, first introduced the Fibonacci sequence to the West in the 13th Century. The Fibonacci number series contains unique mathematical properties and relationships that can be found today in nature, architecture, and biology. The wide presence of these ratios in the universe also extends to the financial markets. It is just one of the reasons why many traders use the Fibonacci trading strategy to identify turning points in the market. The development of the Fibonacci strategy is to come up with a process that could be used to predict movements in the money markets in relation to the different financial assets. Financial assets are expected to offer returns, and the investors have to ensure they are making the right decisions. The strategy ensures an investor can track the performance of various financial assets and can arrive at the right financial decisions. The Fibonacci trading theory also focuses on the Fibonacci ratios which are used in the prediction process. This study focuses on how particular ratios are used in the trading strategy, including 61.8%, 50%, and 78.6% in this study. The traders understand that the Fibonacci strategy comes with various levels, such as retracement and extension levels. This study has illustrated the process of how investors and traders can utilize the trading strategy and how to utilize graphs to explain various scenarios. Furthermore, this study aims to explore the Fibonacci sequence in-depth, the Fibonacci levels strategy in forex trading, and some important points in the trading process.

Keywords: Fibonacci; Trading strategy; Financial assets; Financial decisions (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/978-981-99-5118-5_21

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