Fibonacci Sequence
Elliott Wave Theory glossary · Fibonacci Price & Time Projections
Definition
The sequence 1, 1, 2, 3, 5, 8, 13, 21, 34 where each term is the sum of the two preceding. Underlies wave proportions and retracement levels.
Fibonacci Sequence in plain English
The Fibonacci sequence is a simple number pattern where you get each new number by adding the two before it: 1, 1, 2, 3, 5, 8, 13, 21, 34, and so on. What makes it magical is that as the numbers grow, dividing one by the next settles near 0.618 — a proportion (the 'golden ratio') that shows up all over nature, from sunflower seeds to spiral shells. Elliott Wave Theory claims crowd psychology in markets obeys the same proportions, which is why those Fibonacci numbers become the ratios traders use to measure how far waves rise and how deep they pull back.
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