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Chapter Three - Additional Tips, Tricks & Techniques
Section Two - Fibonacci Levels (Excerpt)

PTC_01_04_01_3.GIFFibonacci was a 12th century Italian mathematician credited with the discovery of some very unique and interesting relationships between certain series of numbers. A vast amount of material is written about his findings, detailing their application in both the arts and the sciences.

Simply put, the Pattern Trapper Approach to Short-Term Trading uses Fib Retracements on an intra-day basis to measure how far a market has retraced its primary move. It helps determine in large part, how much the market has taken back, from that which it has already given. If the market "takes back" only a small portion (.382) before continuing in the primary direction, we know that the trend is strong and that it will likely continue past the most recent intraday swing pivot. If the market "takes back" a slightly larger piece (.5), then we know that continuation of the previous trend is less likely. And if it "takes back" a significant chunk (.618), we know that the trend is much more poorly established than original impressions might have left.

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