Larry Pesavento has been trading for 30 years and is primarily a day trader. Fibonacci Ratios With Pattern Recognition describes high probability patterns that coincide with clusters of Fibonacci price projections that provide the short or intermediate term Wader with high probability and low risk Wade setups. Chosen as the Book of the Year by the 1997 SuperTraders Almanac. A well focused and well organized study in the application of Fibonacci relationships.
Introduction:
Over the past 20 years the use and misuse of the Fibonacci Summation Series proliferated to the point that commentators on the nation’s TV business channels now present them-selves as resident experts. 1 lay no claim to being an expert. However, my studies always included an extensive examination of Fibonacci numbers. My pragmatic position on anything I learned is that it I could not use what I was studying to help in trading, then I was not interested in pursuing it any further. If this material stimulates your interest in the subject, then introducing you to it will be worthwhile. A word of caution, this material is based on the probabilities of trading.
The art of trading is one of risk management. Amos Hosteller, one of the founders of Commodity Corporation in Princeton, New Jersey, used to say, “take care of losses and the profits will take care of themselves.” 1 refer to this quote a lot because it is very important!
The pattern recognition methodology illustrated in the text will be of interest to anyone who ever traded using technical charts. I can say with confidence there arc very few who researched patterns to the extent I have. Some of the references date back to the early 1900’s. Each of these patterns is based on ratio and proportion. A technical chart is nothing more than a road map with a price and time axis. These patterns repeat with a great deal of regularity. My best students have been airline pilots. They seem to approach trading like they approach flying, following a flight plan. The similaritie s to trading are numerous.
Finally, one of my goals in writing this book is to expose you to the subject of ancient geometry. Fibonacci numbers are an integral part of the numbers that make up the subject of ancient geometry. It will be of interest to some of you that many of these sacred ratios trace their origin to the cosmos. 1 will not spend a significant amount of time relating my experiences in astro-harmonics research. The subject is too vast for me to consider. More importantly, it is not necessary for profitable trading.
Contents:
- Clues from the Cosmos
- Harmonic and Vibratory Numbers
- Geometric Characteristics of a Price Chart
- The Primary Patterns
- Classical Chart Patterns Using Ratios and Proportion
- The “Butterfly” Pattern
- The Opening Price
- Entry Techniques
