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Fibonacci - Who Was He And How Could He Improve My Stock Trading Profits?
By: Chris Towland
The word Fibonacci means a lot of things to a lot of different people. For
mathematicians, Fibonacci is an important number sequence. For some painters,
sculptors, and other visual artists, Fibonacci is a principle theory of the
arts. For traders, businessmen, economists and the like, Fibonacci is a system
that can efficiently predict market trends. Yet, for most of us, Fibonacci
sounds incredibly complex and something that we'd rather not discover. But what
exactly is Fibonacci? What does it mean and for what is it used?
Fibonacci, which means son of Bonacci, is actually a nickname used by the famous
Italian mathematician and businessman Leonardo Pisano. Bonacci, on the other
hand, is the nickname of his father and it means 'good natured' or 'simple'.
While Fibonacci was born in Italy, he spent most of his childhood years in Bugia
(now Bejaia), a Mediterranean port in Algeria where his father, Guilielmo,
worked as a consul for the merchants of Pisa. It is in Bugia where he learned
the Arabic numeral system, and later as he traversed the rest of the
Mediterranean world, he learned more of the Arabic mathematical system and its
practical uses.
In 1200, Fibonacci ended his travels and returned to Europe. There he wrote a
number of books that disclosed the mathematical skills he had learned in his
Mediterranean travels. Among his works that were published are the Practica
Geometriae, Flos, Liber quadratorum, Di minor guisa, and his commentary on Book
X of Euclid's Elements; the last two mentioned, unfortunately, are already lost.
His Liber quadratorum, or Book of Squares, is probably his most magnificent
book, but it was not his most popular work. His most popular work was rather the
Liber Abaci, his first book that was written in 1202 where he introduced to the
Europeans the Arabic numerical and mathematical system. In this book, he also
taught the Europeans how to use such mathematical system in accounting and in
trading. Most importantly, it is in the Liber Abaci where he introduced the
Fibonacci numbers and sequence for which he is best remembered today.
The Fibonacci numbers, or sequence, was first used in Liber Abaci as a solution
to a problem regarding the ideal population of rabbits. It is a recursive number
sequence that starts with 0 and 1, and the succeeding numbers being the sum of
the two numbers preceding it. This number sequence efficiently predicted the
ideal growth of the population of rabbits. Later, mathematicians and scientist
discovered that the Fibonacci number sequence has a lot of other uses aside from
just predicting the population growth of rabbits. They have discovered that the
Fibonacci sequence, in fact, occurs in many various patterns of nature.
What started out as a way of counting rabbits has now found a large number of
other uses and applications. And as our present day scholars continue to study
about the Fibonacci sequence, more and more uses for it continue to be
discovered. Today, there are a variety of applications where the Fibonacci
sequence, and its derivatives, are being used. It has found use in many computer
programs. A ratio derived from the Fibonacci sequence, called the Golden Mean,
has been considered by ancient Greeks to be the ideal aesthetic ratio and is now
being widely used by many visual artists in their works. The Fibonacci trading
system, which is an efficient way of predicting future trends in the world
financial markets, has also become popular to expert traders and aspiring
traders as well.
Who in the past might have known that such a simple number sequence like the
Fibonacci numbers would have a great impact on a lot of things today? Maybe, not
even Fibonacci himself.
About the Author:
To learn more about how you can use Fibonacci to accurately predict major stock
market turning points, visit Fibonacci Trading at
http://www.fibonacci-trading.com
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