Letters To S&C by Technical Analysis, Inc.
In his article in the April 2009 S&C on the Fibonacci sequence and its “golden ratio” (“Fibonacci Tools”), Alexander Sabodin points out that the golden ratio is actually an irrational number so must be approximated. Your readers may be interested to know that its exact value can be written as (1+√5)/2. This allows one to find the ratio to any accuracy using a suitable algorithm for square root.
I would consider as correct both this expression and the one in Alexander Sabodin’s article. The value of (1+√5)/2 is 1.61803398875…, which, as Sabodin stated in his article, is an irrational number that is approximated as 1.618.
Note: Rick Martinelli has contributed several articles to Stocks & Commodities over the years, including “Pattern Recognition In Time Series” (January 1998), “Harnessing The (Mis)Behavior Of Markets” (June 2006), “Trading Within The Cup” (September 2001), and “Cup-with-Handle And The Computerized Approach” (October 1998). Locate electronic copies of these and other articles by using the search engine at our Online Store at our website, Traders.com.—Editor