Fibonacci numbers were named after an Italian mathematician called Leonardo Fibonacci. Fibonacci developed the numbers in 1170 when he was carrying out studies on the Egyptian Great Pyramid of Giza. Simply put, Fibonacci numbers are a series of numbers in which the next number in the sequence is obtained by taken a certain number in the sequence and adding to it its predecessor. The number between two numbers in the sequence is the Fibonacci ratio. Such a sequence would look like this: 1, 2, 3, 5, 8, 13, 21, 34, 55 and so on.

We all are familiar with the fact that successful traders use Fibonacci and the Golden ratio. Before, we all get ready to try our luck, it is imperative that we know and understand what they are. While Fibonacci numbers and sequence was first known to appear in a book (Liber Abaci ) written by a famous 13th century mathematician Leonardo Fibonacci da Pisa in 1202 as a solution to a problem. The question quoted "How many pairs of rabbits can be generated from a single pair, if each month each mature pair brings forth a new pair, which, from the second month, becomes productive?"

Fibonacci sequence - 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc.

Interpretation of the Fibonacci numbers in forex technical analysis anticipates changes in trends as prices approach lines created by the Fibonacci studies. When used in technical analysis, the golden ratio is typically translated into three percentages: 38.2%, 50% and 61.8%. However, more multiples can be used when needed, such as 23.6%, 161.8%, 423% and so on.