Using Fibonacci Numbers on Moving Average

By Ali_St | Paradoxal_Investment | 19 Jun 2022

Since everyone here is familiar with trading and terms related, I won't bother to explain what fibonacci numbers or moving averages are. I just want to point out that using fibonacci numbers instead of classical (and mostly even) numbers works better!

In classic technical analysis investors mostly use even numbers on moving averages like 5, 25, 50, 100, 200. There are even special terms related to these numbers, as golden cross (when 50 days MA breaks over 200 days MA) or death cross (when 50 days MA cross 200 days MA downside)

Instead of using these classical numbers I prefer to use fibonacci equivalent of them. For example;

Instead of 25, I use 21,

Instead of 50, I use 55,

Instead of 200, I use 233 etc.

Let's see some example on BTCUSD chart how do those numbers work:


As you can see green 233 days MA pointed last top almost precisely at the end of march!

Also you can see yellow 377 days MA worked as a nice support line from 2021 june to 2022 february, and when it is broke down, downside trend started on the instrument.

And finally white 610 days MA (the last castle) tried to hold the instrument for 3 months but at the end it officialized the bear market last month with negative crossing! Let's zoom in to that part in order to see how precisely it works:

BTCUSD Chart 610 MA

Look at candles carefully! You can see closing/dip/top figures always occured in relation with 610 MA. If we used 500 instead of 610, we couldn't utilize these trading opportunities.  (I can't add image for 500 days MA, I guess there is a limit for images in a post. But you can compare yourself.)

As final thoughts, I think when it comes to moving averages market makers use fibonacci numbers in order to prepare their plans, so I use them also. But since most people use even numbers like 50, 100, 200 and 500 they also include these numbers for their plans (mostly for setting traps.)

You can use these numbers in every range; 5 min, 15 min hourly, daily, weekly etc. Just don't forget that when time range gets bigger accuration rates increase! 

Fibonacci numbers to use in technical analysis: 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610 and even 987 for long, long, long terms :) 

Thanks for reading! Follow me for more technical analysis tips!

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38 years old, economist, trading-addict


Sharing experience and thoughts on markets and trading after 20 years in traditional stock markets.

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