# Fibonacci Time Zones & Ratios

Continued from Fibonacci Retracements and Extensions

#### Fibonacci Time Zones & Ratios

The vast majority of all Fibonacci analysis is concerned with Fibonacci retracements and Fibonacci extensions. However, other less common Fibonacci tools include Fibonacci Time Zones, Fibonacci Fans, and Fibonacci Arcs.

#### Fibonacci Time Zones

While Fibonacci extensions and retracements measure changes in price (y-axis, horizontal bands), Fibonacci Time Zones measure changes in time (x-axis, vertical bands). Fibonacci Time Zones are vertical bands with days or periods equal to numbers in the Fibonacci Sequence.

Fibonacci Time Sequence: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987 . . .

Since the first five numbers of the Fibonacci Sequence are so tightly bound, the initial periods create a vertical cluster that can be ignored. As with other Fibonacci tools, the starting point should be a peak or trough in price. The time zones extend vertically forward, whereby the 8th period corresponds to 21 days (or periods).

• 8th zone = 21 days or periods
• 9th zone = 34 days or periods
• 10th zone = 55 days or periods
• 11th zone = 89 days or periods
• 12th zone = 144 days or periods
• 13th zone = 233 days or periods

According to theory, pivot points in price activity might occur around these Fibonacci periods. #### Fibonacci Ratios

A similar tool, Fibonacci Time Ratios, applies the same technique across the x-axis to measure activity across time, but instead of producing bands related to a fixed period, a Fibonacci Time Ratio produces vertical bands corresponding to Fibonacci Ratios:

When a number in the Fibonacci series is divided by the number preceding it, the quotients themselves approach the Fibonacci constant (Φ) also known as the Golden Ratio (1.618):

1/1 = 1,   2/1 = 2,   3/2 = 1.5,   5/3 = 1.666…,   8/5 = 1.6,   13/8 = 1.625,   21/13 = 1.61538,   34/21 = 1.619,   55/34 = 1.6176…, and   89/55 = 1.618

The inverse process (e.g. 55/89 instead of 89/55) also produces a constant: 0.618, or φ. Skipping a number in the sequence (e.g. 55/144 and 144/55) produces two more constants: .382 and 2.618

Using this method, Fibonacci Time Ratios are applied more similarly to Fibonacci Extensions and Retracements than are Fibonacci Time Zones.

Like Fibonacci Time Zones, these ratios often correspond to pivot points in price activity. 