Effectiveness of vertical fibonacci retracements and extensions across major indexes.

• Main Authors: Foo, Suan Yee., Lim, Si Ling., Ng, Xin Yu.
• Other Authors: Choong Chewn Seng, Edmund
• Format: Final Year Project
• Language: English
• Published: 2010
• Subjects: DRNTU::Business::Finance::Equity
• Online Access: http://hdl.handle.net/10356/20929
• Institution: Nanyang Technological University

Fibonacci ratios have long captured the interest of people from ancient times. Be it the growth pattern of a Nautilus seashell, men’s natural attraction to a divine proportion of beauty, or the optimal branching of plants [Knott and Quinney, 1997]. Fibonacci ratios are the most important mathematical presentation of natural phenomena ever discovered [Fischer, 1993]. Today in the financial industry, traders and analysts continue to tap into the mystery of these ratios, as they employ Fibonacci techniques in their analyses of markets. Hence, our research applied project aims to verify the effectiveness of Fibonacci techniques in financial markets. Specifically, the success of Fibonacci retracements and extensions across indexes would be examined in this research. As experienced investors know that one can add, subtract, multiply and divide Fibonacci ratios to obtain another, our research also seeks to ascertain the feasibility of these ratios in the various indexes. In addition, individual practitioners may identify tops and bottoms used for calculating Fibonacci retracements and extensions by eye-balling them, which is a subjective means of finding tops and bottoms. Thus, this research aims to objectively identify the tops and bottoms with the help of technical indicators.