Date: July 5, 2010

Re: Rabbit Mathematics

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Why do traders use Fibonacci? Did you know it was originally a formula to calculate rabbit reproduction? What does a formula for rabbits have to do with trading futures? NOTHING. Consider the results - out of millions of traders, why then did the Harvard School report that 97% of traders lose money, 2% break even and 1% win. You must also conclude that 97% of what you learn about trading is misinformation. Fibonacci is misinformation. Don't bother sending me charts. I already know it would work some of the time, but never all the time. Try and use Fibonacci on the cattle market and your Fibonacci theory will fall apart. Below is what I wrote a long time ago about Fibonacci. It is quite useless to trade the markets. If you want the answer to trading the market, there is one thing you can do - click here.

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Fibonacci’s Rabbit Mathematics

How many rabbits will be born in one year starting with two newly born rabbits? Rabbits can start to breed after two months old.

Leonardo Pisano (also known as “Leonardo Fibonacci”) calculated 233 rabbits from the original parents. Starting with one pair of rabbits that do not breed for the first two months, on the fourth month, the offspring begin to breed, and so on. This gave birth to the famous Fibonacci sequence.

1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233

The Golden Mean

1 ÷ 2 = 0.5

2 ÷ 3 = 0.666

3 ÷ 5 = 0.666

5 ÷ 8 = 0.625

8 ÷ 13 = 0.615384615

13 ÷ 21 = 0.619047619

21 ÷ 34 = 0.617647058

34 ÷ 55 = 0.618181818

55 ÷ 89 = 0.617977528

89 ÷ 144 = 0.618055555

144 ÷ 233 = 0.618025751

The rounded 0.618 is called the “Golden Mean” upon which all proprotion is based. When you divide the higher number by the lower number, you end up with the 1.618.