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The FIBONACCI CHRONICLES
Stock Analysis Using Fibonacci Principles

I started daytrading in May 2005..... and by April 2006 I finally realized that I was really bad at trading - a cruel revelation voiced by my tax accountant who seemed to take great delight in pointing out that I had gone thru several thousand dollars in my trading accounts.

I'm not a wealthy man, but I DO have my pride. So it was with a wounded sense of self esteem that I decided to ponder my own stupidity, and to try to improve the way I traded stocks. After all, all I wanted to do was make a few bucks - what could be so hard?

So I spent a great deal of my spare time on the Internet, googling things like chart analysis, E-wave theories, candle sticks, chicken innards, and divine intervention. And it seemed to me there must have been (still are) millions of documents available that held out the promise of steady profits, that I could "trade like a Pro", or at least know when to buy and know when to sell.

So of course, I went thru a few thousand dollars again. And I wound up just another confused daytrader - I was still basically guessing at what I was doing, but at least I was certain that I wasn't alone.

But then, on one of those dark lonely nights prowling the Internet, I ran across the history of Leonardo Fibonacci - an incredibly interesting fellow from the 12th century. His biography explained in simple terms the "Fibonacci Sequence", and gave a few examples....

I was intrigued enough to do a google on Fibonacci and study this amazing field of mathematics. I'm not quite certain why, since I am neither a mathematician nor a scientist - and my college experience in those subjects is a dark secret best left untouched. But there was something quite simple that I discovered - that seemed to jump out at me - as I explored further. And it has stayed with me.

Fibonacci mathematics give me a headache - they always have. Divining patterns out of number sequences ranks right up there with Voodoo to me. But what jumped out at me was not the theories behind sequential number patterns - not at all. What struck me was the same recurring percentages.... and how those percentages could predict another number in the Fibonacci sequence.

SAY WHAT? HUH?

What I mean is something as simple as using percentages to describe something real - like interest on a bank account or home mortgage. People worldwide are familiar with percentages, and often use them without thinking.

So for me, it was the Fibonacci percentages that made sense, that gave me something to wrap my brain around.

As it turns out, the same thing happened to a couple million other people too, because I began to notice other people using Fibonacci percentages to do a lot of things. And I'm convinced that Fibonacci mathematics has only recently re-discovered.

To make a long story short, here are the important (for stocks) Fibonacci percentages that I have learned to use, that I have great respect for, and that I really don't care to explain further than they seem to work really, really good!! And I've been designing Fibonacci formula's and using them since September 2006

14.6% 26.4% 38.2% 50.0% 61.8% 73.6% 85.4% 97.2%

I have highlighted in blue the two primary Fibonacci sequenced percentages that are the most important - and most used - in Fibonacci Analysis.

I'm not trying to write a thesis here - I would have to pretend to be someone I'm not. But what I WILL do is present some of the formula's that I've developed and that I use every day. I'll try to explain how they work. And if you follow my posts on Investors Hub (IHUB) bulletin board, you will see my successes and failures. So far, I'm happy to say, I'm now making money as a daytrader - and I give credit to the formula's I've developed.

CREDIT GIVEN - I cannot take credit for the Fibonacci Support/Resistance calculator. I borrowed the concept from LiveCharts UK (link)

I should also say that there is every possibility that the formula's I have developed - and continue to develop - have been discovered and used someplace else in the world. I can guarantee that I am not alone in exploring and discovering Fibonacci Analysis for use with stocks.