This week we look at the chart for The Dow Jones Index as our example of using the Fibonacci series. Most Stock market technical analysts/traders commonly use tools such as Fibonacci & Gann analysis methods as part of their investment strategy, as they prove useful in showing points of high potential for trades.

Before we start our review, let’s just do a very basic recap on the Fibonacci numbers: The numbers are created by the addition of the two previous numbers (in sequence) as follows:

0,1,1,2,3,5,8,13,21,34,55,89,144,233,377 and so on. The relationship of any number and the previous number is 61.8%, any number and the two numbers previous it is 38.2% and so on…The relationship of a number and the next number forward is 161.8%, two numbers forward is 261.8% and so on…

DOW JONES Index Fibonacci Review – VIDEO
View Chart (Large)

Source: http://www.tradingwithgods.com/