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In this short ebook I will show you a strategy applicable in Forex

(but not only) based on trendlines and Fibonacci levels. Strategy that seeks to
exploit the "M" and "W" pattern, formed when the market reaches a top or a
bottom.

What you will read in the following pages, is my personal

interpretation of the two patterns. One way that I developed for trying to
predict what may be the future movement of a market. This, after having
observed and studied many similar situations and to have identified, under
certain conditions, a subsequent movement common to most cases.

Actually, if there is anything of new under the sky, the patterns

have already been shown by Elliott first (Elliott waves) and Joe Ross after (1-2-
3 high or low). What changes is: input in the market, target and stop loss.

Within the ebook, also all the necessary conditions are explained
because the two patterns can be used for trading. Many examples illustrated
step by step, make learning the strategy very simple.

For any questions you can write to me at the email address

info@tradingwithdavid.com or visit my website www.tradingwithdavid.com.

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 There are several graphical representations of the price of a
market. Likely the most used is the price bar. I prefer to use another system:
the candlestick.

The candlestick, originates in the 18th century as a method to

predict the price of rice. Its inventor, Menehisa Homma, earned a fortune
with this type of graphic representation. As you can see in Figure 1 it is a
system that gives us the same information as a price bar but at a much more
immediate visual level.

Figure 1 - Candle-Line

Candlestick analysis can be used with other forms of technical

analysis, in fact, often it can be useful to try to better interpret price
developments. In the candlestick, to represent the swing of the price in a unit
of time, which can range from one minute up to a month, uses a figure called

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Candle-Line. It is formed by a central body called Real-Body, which indicates
the hike in price between the opening and closing, and the Shadows, lines that
represent the high and low prices of the chosen time frame and called
respectively Upper Shadow and Lower Shadow. As for the bar chart, we need
the opening, high, low, and close values.

The body of the candle can be black or white: you have a black
body when the close is below to open and then characterizes a day with a
negative trend, while a white body shows us a rise day with a closing price
above the opening. Technically, the body is not coloured in white, but is
simply blank, to facilitate the work of the computer.

This was one of the adaptations that has been used when exporting
the theory to the West, in fact the Japanese use red instead of white for the
bullish days. Today they are used in addition to the colours black and white
even green (bullish days) and red (bearish days).

As mentioned, this representation of the price is more immediate.

The colour of the body makes us immediately understand whether the title
from opening to closing rose (white or green) or fallen (black or red). If the
bullish have had the upper hand on a bearish or if the opposite occurred.

The candlesticks count several typical figures that I will show

you,but more than 100 patterns that I will not explain because they are not
object to this e-Book.

You can see an example of a candlestick chart in Figure 2 with

Eur-Usd. With this type of representation it is now an immediate visual of the
progress of the cross. You notice the prevalence of red candles when the
market goes down and of green ones when, instead, the market goes up.

At the end of the chart, finally, there is an alternation of green/red candles and
several candles with long shadows and small bodies. This is a typical signal
that the market does not have a precise direction and moves horizontally.

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Sometimes it means that the trend has ended and, the market soon will move
in the opposite direction.

Figure 2 - Eur-Usd chart candlestick

Looking at the chart, you will also notice that the candles have
different length and shapes. Some of them have a specific name and they are
very important if inserted within a determinate graphics context. Here are the
main.

Long candle. It's a candle which has a long red or green body and
two very short shadows (Figure 3).

Figure 3- Long candle

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 Short candle. It is a candle that has a short green or red body and
two very short shadows (Figure 4).

Figure 4 - Short candle

Marubozu. They are long candles with green or red body with the
characteristic of being devoid of shadows (Figure 5).

Figure 5 - Marubozu

Spinning Top. It's a candle which has a very short body and
shadows very marked. They indicate a phase of indecision in the market, it
does not matter the colour of the body (Figure 6).

Figure 6 - Spinning Top

Doji. It is the most characteristic candle-line. It consists of a candle

with opening and closing at the same level, or not far away. There are four
different types of Doji. We have the Long Legged Doji or Rickshaw Man (Figure

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7) where the shadows are very long. This particular Doji signals a strong
market indecision.

Figure 7 - Long Legged Doji or Rickshaw Man

The Gravestone Doji (Figure 8) is when there is only the upper

shadow and it is very long. It should be treated as a strong negative signal,
especially if identified in areas of market highs.

Figure 8 - Gravestone Doji

Similarly, the Dragonfly Doji (Figure 9) with a single shadow, the

lower one, which leaves hope for a spark bullish, particularly if it will be
completed in areas of market lows.

Figure 9 - Dragonfly Doji

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 The fourth type (Figure 10) finally, in cases where open, close, high
and low are at the same level (although obviously very rare, it would leave as
to thinking there are almost zero exchanges).

Figure 10 - Doji with open, close, high and low at the same level

This short description about candlestick has the only purpose of

illustrating what are the main characteristics of this type of graphic
representation are, in particular for all who read this e-Book who are
approaching trading for the first time.

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 All markets have levels upward and downward in which they
struggling to overcome them and very often they indicate the end, at least for
the moment of the trend. These levels are called support and resistance and
they are very important to trade because they provide an indication where
you should take profit or where to open, after a significant bullish or bearish
signal, a trade. More precisely:

• The support reflects the inability of a market to drop below a certain

price level.

• The resistance reflects the inability of a currency pair to climb above a

certain price level.

Rather than level is more correct to talk of support/resistance area.

This is because more and more often we see extreme attempts to rise a market
to sell it at a more favourable level or bring down a market in order to buy it a
lower price before it bounces or changes its trend (false breakout).

Now we look at a concrete example. In Figure 11 you find the daily

chart of Aud-Usd. Highlighted with two lines, you can see an area of
resistance.

You can see how in the course of the sessions, Aud-Usd reaches
repeatedly 1.0575/1.0600 area and then it reverses is gait.

We certainly got a good profit by opening bearish positions when

Aud-Usd to reach that area.

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 Figure 11 - Aud-Usd, Daily chart with Resistance area

What I do to evaluate the quality and strength of the resistance

area, it is to check the same chart, but with a larger time frame, and to draw,
the same two lines at the same levels seen on the daily chart (Figure 12).

Figure 12 - Aud-Usd, Weekly chart with Resistance area

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 From the weekly chart you have a clear confirmation of the
strength of 1.0575/1.0600 area and how the market, whenever reaches this
area, bounces or inverts its trend.

The same goes to support. In Figure 13 below you can see the daily
chart of Nzd/Chf with a support zone.

Figure 13 - Nzd-Chf, Daily chart with Support area

You can see how often, each time the pair reaches the
0.7550/0.7600 area, it can no longer continue its descent and inverts the trend.
Also, you should know that, in weekly chart (Figure 14 below) there is a greater
cleanliness and clarity in identifying the support zone.

The movement in the daily chart (about to half of the figure)

seems to have broken the support zone. On the weekly chart, it is much
clearer that the false breakout with Nzd-Chf that, the following week, draws a
long green candle that will cancel the breakout and will complete a bullish
candlestick pattern.

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 Figure 14 - Nzd-Chf, Weekly chart with Support area

From personal experience, I always recommend to control

supports and resistances to higher time frames. This will give you the more
clear strength and importance of the level identified.

A retracement is another concept and it is a temporary reversal in

the direction of a market's price that goes against the previous trend. A
retracement does not signify a change in the larger trend. In practice, after a
certain movement, it begins the profit taking. Who gains decides to take home
the money and this determines, for a period of time, a movement against the
trend of the market.

This represents a good opportunity to buy or sell at prices more

convenient and to get into the market less tired. An example with the chart
Gbp-Usd above (Figure 15).

During the uptrend, the blue lines show the phases of retracement
while when the market is in a downtrend, the retracements are highlighted by
black lines.

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 Figure 15 – Gbp-Usd, Daily chart with Retracements

Similar to the retracement is the pullback. A pullback is a falling

back of a price from its peak, in an uptrend, or a rising back of a price from its
bottom, in a downtrend. Often pullbacks are seen as good buying or selling
opportunities. An example of pullback in Figure 16.

Figure 16 - Gbp-Chf, Daily chart with Pullback

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 The chocolate-coloured arrow indicates the candle which
accomplishes the breakout. Then after another three green bullish candle,
Gbp-Chf retraces down to test the old resistance level (now support) making a
pullback and resuming, then, the uptrend.

In the next chapter I will explain you step by step the strategy.

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 The strategy I will explain is based on patterns "M" and "W" with
the help of the trendlines and Fibonacci levels. The strategy at first sight may
seem complex but that at the end of this chapter you will see it will be easy to
understand.

M" and "W" patterns, were described by John Bollinger in his book
"Trading with Bollinger bands". I use them in a slightly different way, as you
will see, on the breakdown of a line as input signal and two target areas
determined by Fibonacci projections, where taking profit.

Much easier to do than to say. I will show you the first example.

Figure 14 – Aud-Usd, Daily chart

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 In Figure 17, you can see above, is the reproduced daily chart of
Aud-Usd. Here, I marked with the letter X the high and with the letter A the
low of the last bearish leg.

Figure 15 – Aud-Usd, Daily chart

Figure 16 – Aud-Usd, Daily chart

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 Then, I draw a trendline between the two points, as you can see it
in Figure 18.

After reaching the low, Aud-Usd bounces and with letter B I mark
the high of the retracement and, as I have done previously, I draw a trendline
between points A and B (Figure 19).

Once the market ends the rebound, it starts to come down

following the trend in existence up to that point, failing, however, to touch a
new low. Upon resuming the trend we do not know if it will continue or not.
We simply follow the trend on chart and act accordingly.

If the market will fall below the point A, I will cancel any analysis,
however, if it will form a higher low point (as in this case), I will mark with the
letter C that point and I will draw the usual trendline from B to C (Figure 20).

Figure 17 – Aud-Usd, Daily chart

The construction of the pattern already suggests a "W". Now I start

to see the first two parameters: entry and stop loss.

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 To find the entry, I draw a line that from X point passes through B
point (as shown in Figure 21). I'm going to buy Aud-Usd after a closing above
the line. I usually buy at the opening the new candle.

The stop loss (initially) about 5-10 pips below C point.

At the opposite, in a "M" pattern, the entry will be after a closing

below the line that from X point passes through B point and I will insert the
stop loss (initially) about 5-10 pips above C point.

Very important: When you calculate the various parameters, you

must always keep present the spread between bid and ask. Prices on a chart
Metratrader (or other trading platform) always refer to the bid.

Figure 18 - Aud-Usd, Daily chart

After the red candle whose low forms the C point, there are three
consecutive green candles. The second is the one that closes above the line
dashed and gives me the input for entry long on Aud-Usd at, about, the open
price of the following candle.

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 Now it's time to see another important aspect about the strategy,
the target. The retracement level of C point (respect to AB) is fundamental,
that gives me an indication of where to place my target (even though they are
two targets) based on the AB=CD pattern of Fibonacci.

Below in the Table 1 you can see all the targets based on the depth
of the retracement of C:

Retracement of C Targets (projections of BC)

38,2% First target 2,24 and second target 3,13 of BC

50,0% First target 2,0 and second target 3,0 of BC

61,8% First target 1,618 and second target 2,618 of BC

70,7% First target 1,41 and second target 2,41 of BC

78,6% First target 1,27 and second target 2,27 of BC

88,6% First target 1,13 and second target 2,13 of BC

Table 1 - Targets with Fibonacci projections

On the basis to the table, I get back to the example of Aud-Usd and
I calculate the C retracement (Figure 22).

To make the chart more readable, I inserted (and I will) only levels
that interest me. In this case, you can see that the C point has made a
retracement of 88.6% of AB.

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 On the basis to the table, I identify my two targets to 1.13 times BC
and 2.13 times BC, and that you can see shown in the next chart in Figure 23.

Figure 19 – Aud-Usd, Daily chart

Figure 20 – Aud-Usd, Daily chart

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 I love working with two targets. In this way, with the first target I
earn something from the movement in my favor and once the market has
reached it, I move the stop to breakeven. With the second target, I leave the
market free to run still a little more and I do not risk absolutely nothing.

Figure 21 – Gbp-Usd, Daily chart

Figure 22 – Gbp-Usd, Daily chart

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 Now I will show you a new example, this time it's a double pattern;
before a “M” pattern and shortly after a “W” pattern. In Figure 24 you find the
chart already seen in the previous chapter of Gbp-Usd.

I mark low and high of the last bullish leg with the letters X and A.
Then, I draw the trendline that merges them, as shown in Figure 25 above.

After I await the end of the retracement, I mark its high with the
letter B and, same procedure above, I merge with a trendline A and B points
(Figure 26).

Don't worry if currently something is not clear. At the end of this

double example, I will explain you what are the rules and parameters to
successfully use of the strategy.

At this point, I have to await to see if the market will go up,

creating a new high or, see if it will stop before and will start a downtrend. In
this case, the rise of Gbp-Usd stops two candles after B point and I mark the
high of the retarcement with the letter C. After, I merge, with the usual
trendline, B and C points how you can see in Figure 27 above.

Figure 23 – Gbp-Usd, Daily chart

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 Figure 24 – Gbp-Usd, Daily chart

First, I set the input level by pulling the trendline that from X
passes through B point (Figure 28). Then I insert the stop loss, initially, about
5-10 pips above the C point.

Figure 28 – Gbp-Usd, Daily chart

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 The next red candle closes below the dotted line, it gives me the
input for selling Gbp-Usd. Now I have to calculate the retracement of C point
compared with AB to define two targets. Retracement that you can see in
chart in Figure 29 below.

Figure 29 – Gbp-Usd, Daily chart

Figure 30 – Gbp-Usd, Daily chart

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 The retracement is 70.7% of AB. I check the table and I identify the
two targets at a distance from C point to 1.41 and 2,4 times BC (Figure 30
above). Continuing with Gbp-Usd, as usual, I mark the last bearish leg with the
letters X and A (Figure 31 below).

Figure 31 - Gbp-Usd, Daily chart

Figure 32 - Gbp-Usd, Daily chart

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 After, I merge the X and A points with a trendline (Figure 32
above). Then, I mark with the letter B the end of the retracement and I merge
the A and B points with a trendline, like in Figure 33 below.

Figure 33 - Gbp-Usd, Daily chart

Figure 34 - Gbp-Usd, Daily chart

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 I repeat the same procedure with the C point and I draw the
dotted line that starts from X and passes through B (Figure 34 above).

Now I calculate the retracement of C point (Figure 35) for finding

the two targets (Figure 36).

Figure 35 - Gbp-Usd, Daily chart

Figure 36 - Gbp-Usd, Daily chart

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 Before continuing with the next example, it is time I show you the
conditions necessary for trading with these two patterns.

First thing: X point starts from the high (in a “W” pattern) or from
the low (in a “M” pattern) of the last retracement. You can see explained that
on the last example chart in Figure 37 below.

Figure 37 - Gbp-Usd, Daily chart

The A point: it must to be a lower low (in a “W” pattern) or a

higher high (in a “M” pattern) at least in last 15 wordays (three calendar weeks).
It needs a full correction before the A point is formed.

Full correction means that as prices move down (“M” pattern)

from the potential A point, there must be a single candle that makes both a
higher high and a higher low than the preceding candle, or a combination of
candles (the number of candles no matter) creating both the lower low and the
lower high.

In “W” pattern is exactly the opposite. It means that as prices move

up from the potential A point, there must be a single candle that makes both a

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higher high and a higher low than the preceding candle, or a combination of
candles (the number of candles no matter) creating both the higher high and
the higher low.

The B point: it must retrace the 50% or 61.8%. Neither more, nor
less. If you see in the three examples, B point has always retraced 50%,
although it is not drawn in charts.

Then, it needs a full correction before the B point is formed. It

means that as prices move up from the potential B point (“M” pattern), there
must be a single candle that makes both a higher high and a higher low than
the preceding candle or a combination of candles (the number no matter)
creating both the higher high and the higher low.

In a “W” pattern it means that as prices move down from the

potential B point, there must be a single candle that makes both a lower high
and a lower low than the preceding candle or a combination of candles (the
number no matter) creating both the lower low and the lower high.

Keep in mind, once the B point is formed I don't know if the

market will continue its race to the bottom or if it will form a “W” pattern. I
have to evaluate the evolution of the chart and act accordingly.

The C point: it must retrace at least 38.2%.

At first, these rules, the various Fibonacci retracements, can seem

complex and numerous to remember. With a little of practice they will
become automatic in your analysis. Already explained on the chart of Nzd-
Usd (Figure 38 below) they will appear less complicated.

Analyzing the chart, I have a low (A point), which is the lower lows
of the last 3 calendar weeks, so it is correct. B point retraces of 61.8% and so it
is correct.

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 Figure 38 - Nzd-Usd, Daily chart

The C point that is not formed because it is above the low of the
candle forming the B point (blue dashed line inferior) and therefore is not a
full correction. This is a “W” pattern that I don't trade (even though Nzd-Usd
rises and reaches both targets).

Figure 39 - Nzd-Jpy, Daily chart

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 In Appendix A, at the end of the ebook, I have put all the
parameters and rules in a table so you always have an eye to see.

One more example before tackling the last aspect of the strategy,
which is the time frame.

You can see the Nzd-Jpy chart in Figure 39 above, with X and A
points marked and with the trendline that merges them.

Once it is formed, I mark the B point and I merge it to the A point

with a trendline (Figure 40).

Figure 40 - Nzd-Jpy, Daily chart

As you seen in the previous examples, I mark the C point (which in

base to the deep of the retracement, it gives me the two targets) and then I
draw the line that from X passes through B point (Figure 41).

In the chart there is also entry and stop loss levels.

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 Figure 41 - Nzd-Jpy, Daily chart

At this point, I only establish, the base of the retracement of the C

point. As well as the two target, then I have all the items I need and that I have
made record of in the chart in Figure 42.

Figure 42 - Nzd-Jpy, Daily chart

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 When the first target has been reached, you can decide to close
part of the position with the stop moved to breakeven, or just move the stop at
breakeven and letting run the market towards the second target with, maybe,
added a trailing stop strategy.

I'm not a daytrader. I use all my strategies exclusively on daily

charts because they give me more free time and a better quality of life, and
because the signals are stronger.

However, no one is stopping you from using this strategy on

smaller time frame, bearing in mind that data, rumors and news can affect the
trend of a market and bring your positions in gain, to close to stop in a very
short time.

Now the strategy should be very clear and it is definitely much

more difficult to explain it in words than to apply it on the charts.

In next chapter there are some considerations but now, in closing,

there are some more examples, as always, with a time frame daily. In Figure
43 a “W” pattern in Eur-Usd chart.

Figure 43 - Eur-Usd, Daily chart

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In Figure 44 a “M” pattern in Eur-Aud chart.

Figure 44 - Eur-Aud, Daily chart

In figure 45 a “W” pattern in Aud-Jpy chart.

Figure 45 - Aud-Jpy, Daily chart

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In Figure 46 a “M” pattern in Usd-Jpy chart.

Figure 46 - Usd-Jpy, Daily chart

In Figure 47 a “W” pattern in Eur-Jpy chart.

Figure 47 - Eur-Jpy, Daily chart

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In Figure 48 a “M” pattern in Eur-Nzd chart.

Figure 48 - Eur-Nzd, Daily chart

In Figure 49 a “W” pattern in Eur-Chf chart.

Figure 49 - Eur-Chf, Daily chart

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 Although based on trendlines, the strategy relies on a concept that
others have already used before. It tries to exploit the typical movement of a
market when it reverses the trend in existence.

Some of you may have (re)seen the 1-2-3 high or low pattern by
Joe Ross in what I had previously explained. In fact Ross has done nothing,
except taking advantage of something that already existed. The Ross's pattern
is nothing more than wave 1, 2 and 3 (or wave A, B and C) by Elliott.

So it is nothing new, or almost new ... What changes is the

different way to use this typical market movement. In the strategy, in
particular, I follow a pattern related to Fibonacci.

Therefore, it is of crucial importance. Fibonacci is also used by

Elliott and Ross to establish the validity of the retracement/pattern. With this
strategy, though, as with Elliott, it is also used to identify the target.

You have seen the strategy, and how I manage the trade. You have
seen where do I enter into market, where I insert the stop loss and where I
identify the target. However I did not mention about some aspects.

I have not entered examples of trades closed to stop. This because

I consider them useless. No strategy in trading is perfect. There are trades
closed in loss and there always will be. The chart of a trade that has been
closed in gain, it serves to explain the strategy. The chart of a trade that has
been closed in stop is useless, because it doesn't teach anything (except that

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you must always place the stop loss) and it explains the obvious: in trading
there are also loss-making trades.

I did not talk about trailing stop. Everyone is free to use their
favourite strategy, especially after the market reached the first target.

Remember always that all the platforms usually have the charts
with the bid price of a currency pair. This is okay if you sell a pair (or if you
insert a stop below a level) but if you buy it (or if you insert a stop above a
level), you are working with the ask and you always have to add to the bid that
you see in your platform the spread bid-ask. At the same, be careful when you
insert the target.

I would remind you my email if you have any questions:

info@tradingwithdavid.com. On my website www.tradingwithdavid.com
you can find analysis, teaching, much more material and ebooks with courses
and the strategies I use daily. That's it, this ebook has come to the end and I
wish you a good trading simple!

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 THE SUMMARY TABLE WITH ALL PARAMETERS AND RULES:
DESCRIPTION "M" PATTERN
It must be the low of last
X
retracement.
At least the higher high in
last 15 days (3 weeks). It's
formed after a full
correction. Full correction
means that as prices move
down from the potential A
point, there must be a single
A
candle that makes both a
higher high and a higher low
than the preceding candle or
a combination of candles
(the number no matter)
creating both the lower low
and the lower high.
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"W" PATTERN
It must be the the high of last
retracement.
At least the lower low in last
15 days (3 weeks). It's formed
after a full correction. Full
correction means that as
prices move up from the
potential A point, there must
be a single candle that makes
both a higher high and a
higher low than the
preceding candle or a
combination of candles (the
number no matter) creating
both the higher high and the
higher low.
 It must retrace 50% or 61.8%
of XA. It's formed after a full
correction. Full correction
means that as prices move
up from the potential B
point, there must be a single
B candle that makes both a
higher high and a higher low
than the preceding candle or
a combination of candles
(the number no matter)
creating both the higher high
and the higher low.
It must retrace 32.8%, 50%,
C 61.8%, 70.7%, 78.6% or 88.6% of
AB.
After a closing below the
dotted line, that from X
ENTRY
passes through B, at the
following opening
About 5-10 pips above C
STOP LOSS
point.
TARGET See table below.
Table 2 - Summary with all parameters and rules
40
It must retrace 50% or 61.8%
of XA. It's formed after a full
correction. Full correction
means that as prices move
down from the potential B
point, there must be a single
candle that makes both a
higher high and a higher low
than the preceding candle or
a combination of candles
(the number no matter)
creating both the lower low
and the lower high.
It must retrace 32.8%, 50%,
61.8%, 70.7%, 78.6% or 88.6% of
AB.
After a closing above the
dotted line, that from X
passes through B, at the
following opening
About 5-10 pips below C
point.
See table below.
 THE SUMMARY TABLE WITH ALL POSSIBLE TARGETS:

Retracement of C Target (projections of BC)

38,2% First target 2,24 and second target 3,13 of BC

50,0% First target 2,0 and second target 3,0 of BC

61,8% First target 1,618 and second target 2,618 of BC

70,7% First target 1,41 and second target 2,41 of BC

78,6% First target 1,27 and second target 2,27 of BC

88,6% First target 1,13 and second target 2,13 of BC

Table 3 - Targets with Fibonacci projections

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 Leonardo Pisano, said Fibonacci (in Latin Filis Bonacci, son of
Bonacci), was born in Pisa around 1170. His father was Secretary of the
Republic of Pisa and since 1192 trade manager at the colony of Bugia, in
Algeria. A few years after 1192, Bonacci took his son with him to Bugia.

The father wanted Leonardo became a merchant and he provided

his instruction in the techniques of calculus. Fibonacci studied arithmetic
procedures that Muslim scholars were spreading in various parts of the Arab
world.

Here he also had contact with the world of the early merchants
and learned mathematical techniques unknown in the West. Some of these
procedures had been introduced for the first time by the Indians, carriers of a
culture very different from that of the Mediterranean. Just to refine these,
Fibonacci traveled extensively, arriving at Constantinople, alternating
business with mathematical studies.

Starting from 1228 there is no further news of the mathematician,

except with regard to the Decree of the Republic of Pisa who conferred him
the title of "Discretus et sapiens magister Leonardo Bigollo". Fibonacci died
some years later presumably in Pisa.

Fibonacci is best known for the sequence of numbers he identified

and it’s known as "Fibonacci sequence" where the first two numbers are 0 and
1, and each subsequent is the result of the sum of the two preceding it: 0-1-1-2-
3-5-8-13-21-34-55-89-144...

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 Moreover, dividing one number to the next (i.e. 34/55), the result
tends to 0.618. If we divide a number by the second later (i.e. 34/89), the result
tends to 0.328. If we divide a number by the previous (i.e. 144/89), the result
tends to 1.618 and is also called golden ratio. If we divide a number by the
second preceding it (i.e. 144/55), the result tends to 2.618.

All numbers that you have already seen inside this ebook. To keep
this short story on Fibonacci and his sequence simple, I don't explain how to
get the other levels such as 0.5, 0.707, 0.786, 0.886 etc.

We find the numbers of the Fibonacci sequence and the gold ratio
everywhere.

In botany: for example the lilies have 3 petals, buttercups 5,

marigolds 13, daisies have 34 or 55 or 89 petals.

We find the Fibonacci numbers also in the flowers of sunflower.

Small inflorescences at the heart of the sunflower, which then turn into seeds,
are willing along two sets of spirals rotating, respectively, clockwise and
counterclockwise. Often the small inflore oriented clockwise spirals are 34 and
those oriented counterclockwise 55; but sometimes they are respectively 55
and 89, or 89 and 144.

Fir cone scales are willing in two families of spirals intertwined,

and each family contains a Fibonacci number of scales. And what about fruit?
Most of the pineapple has on surface 5, 8, 13 or 21 spirals of hexagonal scales.

In music: the piano, the 13 keys of the octaves are divided into 8
white and 5 black, each of which divided into groups of 2 and 3 keys each; 2, 3,
5, 8, 13 all numbers belong to the Fibonacci sequence.

In the violins, the arch that forms the base has its centre of
curvature at a distance of 61.8% of the total length of the instrument. But also
in some musical compositions such as "33 variations on a waltz by Diabelli" by

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Beethoven, which divided his composition into parts corresponding to the
Fibonacci sequence numbers, which ratio corresponds to golden ratio, and the
"Fugues"of Bach.

Béla Bartók's works as being based on two opposing systems, that

of the golden ratio and the acoustic scale; French composer Erik Satie used
the golden ratio in several of his pieces etc.

In painting: Vitruvian man and Mona Lisa (Figure 50) by Leonardo

da Vinci, employ golden ratio proportions.

Figure 50 - Mona lisa by Leonardo Da Vinci ina golden rectangle

In another Da Vinci's masterpiece, The Last Supper, Jesus is

situated at the centre of a golden rectangle. As well as the Venus in the famous
painting by Botticelli.

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 In architecture: in Greek civilization we find the use of the golden
ratio in the Parthenon in Athens, the Temple of Athena at Paestum, in the
statues of Phidias, to name only the best known works.

The Egyptian pyramids, Stonehenge, the medieval cathedrals and

even many modern buildings such as the Guggenheim Museum in New York
and the United Nations Headquarters have golden ratio proportions.

In our body everything is a golden ratio: the distance from the

foot to the navel is the 61.8% of the height of a person; the distance from the
elbow to the hand (with fingers outstretched) is the 61.8% of the length of the
arm; the distance from the knee to the hip is the 61.8% of the length of the leg
(from the hip to the ankle); the distance from the nose to the forehead is the
61.8% of the length of the face etc. etc.

In other words, if you multiply, for example, the distance from the
foot to the navel of a person for 1.618 you find the height of that person. Or if
you divide the distance from the elbow to the hand for the distance from the
elbow to shoulder you get 1.618, the golden ratio.

Figure 51 - Structure of a website

Websites are structured according to the golden ratio (Figure 51

above).

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 In several objects we use every day, like the credit card or the sim
card in your smartphone, and even in "mysterious" crop circles, we find in the
golden ratio.

Not only in mathematics and in trading with Elliott or the

Harmonic pattern (Gartley, Batterfly, Crab...), but everywhere around us we
find Fibonacci with his succession and the golden ratio.

You can explain the meaning of this amazing correlation between

math and natural shapes. For that that we know nobody has found a reason
and the golden ratio remains an outstanding example of that sense of wonder
that can permeate the mind of man and which must not be lived with
embarrassment but as a sign of an interiority pulsating, as it has been
admirably described. Einstein says “the mystery is the most extraordinary
experience that we live. It is the fundamental emotion at the center of true art and true
science. From this point of view, who knows and doesn't prove wonder, who is not
surprised more than anything is similar to a dead man, to a candle that does more
light”.

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