About the 'Golden Ratio | Forex Factory

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About the 'Golden Ratio

  • #1
  • First Post: Nov 2, 2007 3:33pm Nov 2, 2007 3:33pm
I was at Barnes and Noble and was checking out the math section(science)Looking for any book that would catch my eye. I came across "The Golden Ratio" and skimmed through it quick because I had little time to get involved. It seemed fascinating and I trade with Fibs and find them to be very reliable and for some reason puts a smile on my face to see them work.

Sure there supposed or else why would every charting package use them but to actually think of why they work has me curious. From what was described in the book about the various uses of Phi. I always wondered why math geeks were in love with this number and im starting to see why(I love it but im not in love with it).

Has anyone read any books on it? Any recommendations. I could leave it simple and just use the Fibs on my chart but I think a better understanding about it can help me as from what ive seen with charts it does some cool things.

Also I know there are threads on trading systems using Fibs but im looking for more information on the whole ideology of PHi and fibs.
Excuses are the tools of incompetence
  • #2
  • Nov 2, 2007 4:17pm Nov 2, 2007 4:17pm
I think vegas talks about this in his materials(no longer on FF?)

Aside from trading, the Mayan indians used this in all their architecture. It's very interesting how they got the chichen itza temple to line up with the sun in such a way that it shows the shadow of a snake at noon.

Also, supposedly, the Egyptians used this when building the pyramids...which is also interesting to note that, supposedly, the tops of the pyramids align witht the 3 stars of Orion's belt.

Back to trading, I remember seeing fibs work for the first time and thinking there was some secret....now, I know it's because everyone uses them LOL.(although I'm sure there is more to it)

Just rambling,
Nathan
  • #3
  • Nov 2, 2007 4:33pm Nov 2, 2007 4:33pm
Here's an article about the Golden Ratio.
Domo Arigato, Mr. Roboto!
  • #4
  • Nov 2, 2007 4:36pm Nov 2, 2007 4:36pm
Quoting nhallmark
Aside from trading, the Mayan indians used this in all their architecture. It's very interesting how they got the chichen itza temple to line up with the sun in such a way that it shows the shadow of a snake at noon.
Only during the Spring and Fall equinox and only then during the rising and setting of the sun (not at noon).
  • #5
  • Nov 2, 2007 4:50pm Nov 2, 2007 4:50pm
Quoting philmcgrew
Only during the Spring and Fall equinox and only then during the rising and setting of the sun (not at noon).
Oh, sorry...damn history channel LOL. Guess I should research my facts better.

Thanks for the correction.
  • #6
  • Nov 2, 2007 4:53pm Nov 2, 2007 4:53pm
Quoting nhallmark
Oh, sorry...damn history channel LOL. Guess I should research my facts better.

Thanks for the correction.
LOL - I climbed that temple (fun going up - scary coming down) and read a lot about their culture. I couldn't resist.
  • #7
  • Nov 2, 2007 5:46pm Nov 2, 2007 5:46pm
Quoting philmcgrew
LOL - I climbed that temple (fun going up - scary coming down) and read a lot about their culture. I couldn't resist.
I would think that when that civilisation was at its height, and assuming you weren't a high priest, it would have been quite scary going UP the steps
  • #8
  • Nov 2, 2007 6:12pm Nov 2, 2007 6:12pm
Yea i've been reading more on it. It just gets my brain going of how it works in trading and then the other uses of it. Such as the correlation between branches and trees. How its used in architecture. I mean if it was just something out in nature thats cool but then the fact we use it in trading and it works just I don't know I think im going to become obsessed leave trading and become one of those deranged mathematicians that live in there basement and yell at rats.

Thanks for the link mr. Roboto a very good read. nhallmark you could be right. It could just be just so widely used that they work. I just got curious more of the fact that they do work and the fact of what they are based on makes it interesting.
Excuses are the tools of incompetence
  • #9
  • Edited 6:40pm Nov 2, 2007 6:18pm | Edited 6:40pm
No problem, cTrackstar. You should also check out the Wikipedia article on the Golden Ratio. It is actually much clearer than the link I gave.
Domo Arigato, Mr. Roboto!
  • #10
  • Nov 2, 2007 6:33pm Nov 2, 2007 6:33pm
3 years ago, perhaps, I bought a paperback book called The Golden Ratio by Mario Livio from Barnes and Noble on a visit to NYC. Not sure if this is the book you are talking about.

$15 - Interesting but not really trading related material.

Most believe fibs work strickly because so many other use it. Well then how did someone discover the effectiveness in the markets if no one was using them to begin with?

I can post charts for the Dow back in the 20's and 30's before Elliott or Gann's work was published. Fib retracements/projections/cycles all worked to about the same degree that they work now. And as is the case, when then didn't work.
  • #11
  • Nov 2, 2007 6:45pm Nov 2, 2007 6:45pm
Fib ratios, specially the golden ratio are found throughout nature from the planetary orbits to the petals of a flower and the shape of a pinecone. If you believe that they have no influence on the markets, that's your opinion, but it has been proven scientifically that there are repeatable patterns in nature, that affect wildlife. I can't see that it's too far fetched to believe that human beings are not affected to some degree as well.

If this presents itself to be a tradeable edge is debatable, but to say that there's no substance to them is in error.

Here's a few years worth of study.

http://www.goldenratio.org/info/
  • #12
  • Nov 2, 2007 7:04pm Nov 2, 2007 7:04pm
Quoting SunTrader
3 years ago, perhaps, I bought a paperback book called The Golden Ratio by Mario Livio from Barnes and Noble on a visit to NYC. Not sure if this is the book you are talking about.

$15 - Interesting but not really trading related material.
Thats the book. Im not so interesting in the trading aspect. Im sure trading using fibs can be done without understanding the math behind it, its just I use them and seeing them work for the most part intrigues me.

Mr. Roboto I was looking at that earlier and was pretty good at giving me all the different ideas and uses of it.

auxesis- thanks for the link looks as though theres more than enough info. You've hit it on the head with what I was thinking. Of how this stuff has been applied to nature and then we use it in trading. If its original use was a trading tool and it worked thats one thing but because of its origins I find it very interesting that it works in trading. I believe I read somewhere the number can be used for psychology and the effects on human behavior. Obviously in that case we know why it works on charts.
Excuses are the tools of incompetence
  • #13
  • Dec 8, 2007 8:49am Dec 8, 2007 8:49am
  • #14
  • Dec 8, 2007 6:26pm Dec 8, 2007 6:26pm
Also, check out wolfram's 'A new kind of Science'
  • #15
  • Last Post: Dec 8, 2007 6:49pm Dec 8, 2007 6:49pm
Quoting cTrackstar
Thats the book. Im not so interesting in the trading aspect. Im sure trading using fibs can be done without understanding the math behind it, its just I use them and seeing them work for the most part intrigues me.

Mr. Roboto I was looking at that earlier and was pretty good at giving me all the different ideas and uses of it.

auxesis- thanks for the link looks as though theres more than enough info. You've hit it on the head with what I was thinking. Of how this stuff has been applied to nature and then we use it in trading. If its original use was a trading tool and it worked thats one thing but because of its origins I find it very interesting that it works in trading. I believe I read somewhere the number can be used for psychology and the effects on human behavior. Obviously in that case we know why it works on charts.

Thanks to everyone who has provided information......

This is just what I have been looking for...

HOLLA
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