fibonacci retracement /extensions

[greenscorpio]

are they an essential tool for a trader, ive been trading real money over a year now but not sampled them

 

[bluebellmk]

If I drew loads of lines across a chart price would hit one of them. Loads of confirmation bias IMO

 

[charles2]

Fibs are a Predictive Tool

 

[charles2]

Carrying on from the above comment (Fibs are a Predictive Tool)

Does anyone else trade using Fibonacci levels?

 

[HoleyProfit]

They're not essential because there are many people who make money without them. I know people who make money is trading who believe fibs are useless. I strongly disagree, I think they are the most useful thing in trading - if they are used correctly.

I've been trading for around 10 yrs and for most of this time I've used fib extensions/retracements are my main method of analysis and strategy design. I'll perhaps expand on strats another time but for now I'll say I am using fibs to determine entries, stops and targets. Often a combo of retracements/extensions.

Finding consistent ways to draw fibs is critical.

"If I drew loads of lines across a chart price would hit one of them. Loads of confirmation bias IMO" is a common objection of fibs (And many TA things). And if you're randomly drawing lines to be where you want them to be, this will not work. You need non-subjective ways of drawing fibs. This is possible. If you're drawing fibs from swing highs to lows ... there is only one high and one low. There are ways to consistently do the same thing.

I find the market reaction to fibs as inflection points to be spectacular. A very high percentage of the time they will be important for trend decision level. Note - "Inflection"/"Trend decision". This is not saying the fibs hold all the time, more that they will tend to hold or be important as a breakout. This is true of all basic theories such as retracements etc and also of harmonic patterns (And if you want to use fibs, learn about harmonics).

Many fib levels are useful for different things. They can help you determine important support and resistance levels well ahead of time and make trade plans around them - but it only works if you are consistent and honest in drawing the fibs.

 

[THT]

I would expand the way you look at these things - If you're using Fibs then you should also be using all the ratios of other geometrical structures, as you're only "seeing" and using half the picture

Now the ABOVE were plastered onto the chart AFTER the event or the screenshot was taken AFTER the event, this next chart proves I forecast in advance as there's always 1 who challenges you and I only created the projection because a friend asked for it

The thing to sit back and think about is I knew BOTH PRICE and TIME which I show on the thread I created in the Tutorial section of this site - I was very very slightly out on the TIME aspect, but 1 point of perfection on the PRICE aspect which to me is pretty amazing

THT

 

[FX4Newbies]

Fibs work! They are POWERFUL when you know how to use them correctly. When you see price approach a line that was there in advance, and the price turns as if programmed to turn at the line...and you see it happen over and over and over again...anybody would be convinced.

 

[FX4Newbies]

I would expand the way you look at these things - If you're using Fibs then you should also be using all the ratios of other geometrical structures, as you're only "seeing" and using half the picture

View attachment 332836

View attachment 332837

View attachment 332838

View attachment 332839

Now the ABOVE were plastered onto the chart AFTER the event or the screenshot was taken AFTER the event, this next chart proves I forecast in advance as there's always 1 who challenges you and I only created the projection because a friend asked for it

View attachment 332840

The thing to sit back and think about is I knew BOTH PRICE and TIME which I show on the thread I created in the Tutorial section of this site - I was very very slightly out on the TIME aspect, but 1 point of perfection on the PRICE aspect which to me is pretty amazing

THT

Hi THT. I like your signature. It's the absolute truth!

 

[FX4Newbies]

Powerful tools when you consider the fact that the arcs have been on the chart since about December 5th...

And look at what's happening at the time of this post. Looks like those Fib arcs work to me. And it's not just the arcs...all the Fib tools work if you know how to work them.

FX4Newbies

 

[FX4Newbies]

Carrying on from the above comment (Fibs are a Predictive Tool)

Does anyone else trade using Fibonacci levels?

Yes Charles2. Part of my method.

 

[FX4Newbies]

Powerful tools when you consider the fact that the arcs have been on the chart since about December 5th...

And look at what's happening at the time of this post. Looks like those Fib arcs work to me. And it's not just the arcs...all the Fib tools work if you know how to work them.

View attachment 338992


FX4Newbies

Kinda reminds you of this... and I know we can all relate. Price action is very similar.

Image by Gundula Vogel from Pixabay