Leonardo Fibonacci was an Italian mathematician who lived between 1170-1240.
He is considered to have discovered his famous sequence of numbers during his observations of the Great Pyramid in Giza (Egypt). The Fibonacci sequence is a numerical series in which every added number is the sum of the preceding two: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc.
There are some interesting ratios between these numbers. For example, every number is approximately 1.618-fold as much as the preceding one, and every preceding number makes approximately 0.618 of the successive one (Golden Ratio).
There are some widely known technical analysis tools based on Fibonacci numbers. Some of the popular tools used are Fibonacci Arcs, Fibonacci Fan, Fibonacci Retracement, Fibonacci Time Zones and Fibonacci Channel.
General principle of interpretation of these tools is: If the prices approaches to the lines built using these tools, the changes in the trend development are highly probable.
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