Fibonacci=Money?

Overview

The ratios used in this experiment, which were derived from the Fibonacci sequence by dividing the numbers in the sequence to get each individual ratio used. The Fibonacci sequence was derived by summing the two previous numbers in order to get the next number in the sequence. If this is used properly it can help predict the corrective or retracement waves of financial markets. The purpose of this project was to determine which financial market the ratios derived from the Fibonacci sequence had the closest correlation with. At the time of this experiment, and to present day, this was highly disputed by financial analysts and some investors made the argument that there wasn’t any correlation at all. It’s hypothesized that the S&P 500 price movements will show the closest correlation to this sequence because of the great variety of domestic and international traders that follow it. In this project, the S&P 500 index had the closest correlation to these ratios in two out of three tests: the Fibonacci Arcs and Fibonacci Fans tests. However, it wasn’t as closely correlated to the ratios compared to the Price of Gold, but it only differed in correlation by 0.02%, which was deemed statistically insignificant, so this test was a tie. This experiment relates to real world situations because people have their retirement savings and children’s college funds invested in these financial markets and utilizing the Fibonacci ratios can help investors decide when to purchase and sell equities, or anything.

Competition history

• AJAS 2018 Category not listed

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