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In finance, Fibonacci retracement is a method of technical analysis for determining support and resistance levels. [1] It is named after the Fibonacci sequence of numbers, [ 1 ] whose ratios provide price levels to which markets tend to retrace a portion of a move, before a trend continues in the original direction.
The sequence also has a variety of relationships with the Fibonacci numbers, like the fact that adding any two Fibonacci numbers two terms apart in the Fibonacci sequence results in the Lucas number in between. [3] The first few Lucas numbers are 2, 1, 3, 4, 7, 11, 18, 29, 47, 76, 123, 199, 322, 521, 843, 1364, 2207, 3571, 5778, 9349, ... .
Fibonacci instead would write the same fraction to the left, i.e., . Fibonacci used a composite fraction notation in which a sequence of numerators and denominators shared the same fraction bar; each such term represented an additional fraction of the given numerator divided by the product of all the denominators below and to the right of it.
The reciprocal Fibonacci constant ψ is the sum of the reciprocals of the Fibonacci numbers: = = = + + + + + + + +. Because the ratio of successive terms tends to the reciprocal of the golden ratio, which is less than 1, the ratio test shows that the sum converges.
Fibonacci search has an average- and worst-case complexity of O(log n) (see Big O notation). The Fibonacci sequence has the property that a number is the sum of its two predecessors. Therefore the sequence can be computed by repeated addition. The ratio of two consecutive numbers approaches the Golden ratio, 1.618... Binary search works by ...
To encode an integer N: . Find the largest Fibonacci number equal to or less than N; subtract this number from N, keeping track of the remainder.; If the number subtracted was the i th Fibonacci number F(i), put a 1 in place i − 2 in the code word (counting the left most digit as place 0).
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