TITLE : FIBONACCI APPLICATIONS AND STRATEGIES FOR TRADERS.

This book deals with the most fascinating subject in stock and commodity analysis. It is the integration of Nature's Law (seen as a behavioral phenomenon) into price studies to create a serious and reliable investment tool. New discoveries with the Fibonacci summation series open the window for a price-time analysis that can pinpoint tops and bottoms with a stunning accuracy.

For 50 years, R.N. Elliott has remained a legend for legions of analysts. Without his ideas, this book could never have been written. His brilliant deductions include:

* Market swings are a reflection of human behavior.

* Human behavior can be related to a phenomenon of nature.

* Nature's law can be measured by using the Fibonacci summation series.

From his findings, published in The Wave Principles, Elliott claims that he can forecast price movements.

Here we separate ourselves from Elliott. We consider this impossible and will prove it. Because of the wave count, the Elliott concept becomes highly subjective. Instead, we approach the markets by focusing strictly on the Fibonacci summation series and ignoring the wave count. This removes all subjectivity and replaces the uncertainty with definitive, tested rules. The introduction of entry and exit rules makes disciplined, even automatic trading possible.

The book begins with an indepth study of the Fibonacci summation series, emphasizing the Fibonacci ratio. It is always surprising to learn that major achievements in the fields of natural science, nuclear theory, radio, and television have this ratio in common. The Fibonacci ratio is not just a numbers game but one of the most important mathematical presentations of natural phenomena ever discovered. We apply this ratio as a geometric tool to equity and commodity price swings using techniques never seen before.

The Fibonacci ratio is best used in forecastingr correction targets. However, different strategies are presented, including a very short- term approach for those investors who do not want to hold a position longer than one or two days. A computer study was used to confirm the validity of this strategy.

In addition, the Fibonacci ratio is used to analyze price targrets on extensions. Extensions happen in run-away markets. An investment entered at the end of the extension is considered the safest strategy in the Elliott concept.

I introduced the idea of time analysis in 1983 at a seminar in Chicago. Nine years later, with the aid of a computer, it is now possible to show that this analysis is a valid investment alternative.

The final chapter introduces the logarithmic spiral, the investment tool that takes a lot of imagination to believe in. Even though we now have a computer program to draw the spirals, it took us many years to understand it and to develop rules that make it easy to use for investment decisions. This spiral is the link between Nature's Law and human behavior, expressed in the price pattern of stocks and commodities. Price patterns don't happen by accident. The logarithmic spiral allows us to analyze market swings both "price and time" with a precision never seen before.

This book is intended to be educational. Within the size limits of this book, the concepts are presented thoroughly with detailed examples. I hope that you find these ideas as exciting, enlightening, and useful as I have.

ROBERT FISCHER Chicago, Illinois