Fibonacci was a man who looked for mathematical patterns in nature. He found that rabbit populations grow  in patterns, that the veins of a leaf, the lines along a snail shell, even waves in water are all spaced apart in a sequence that conforms to Aristotle’s golden rule.

He described the sequence in mathematical form by declaring that each number in the sequence equals the two numbers preceding it: 1, 3, 5, 8 and so on. Now, you might ask how does nature KNOW it’s supposed to correspond with this sequence? Is there some kind of Darwinian chain of events through which differently sequenced events or patterns simply die out? No idea. All we know is that it works! Strangely, the Indians had discovered the same sequence 500 years earlier.

Nowadays, analysts use the sequence to predict retracements – those pullbacks a trend undergoes before continuing on its trendy way. They use it so much that every platform worth its weight in bytes has at least one Fibonacci charting tool – a series of levels that you can pull across a trend to check up on its retracement levels. These are placed at 23.6% 38.2%, 61.8% and 100% the distance between support and resistance.

Again: is this magic or simply traders everywhere pulling Fibonacci retracement levels across their charts and acting accordingly? Either way, the levels have become holy writ and the basis for many other tools. Besides the simple retracements, Metatrader also offers Fibonacci time zones, fans, arcs, channels and expansions. The last already extends into wave theory.