fibonacci retracement /extensions

greenscorpio

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are they an essential tool for a trader, ive been trading real money over a year now but not sampled them
 
If I drew loads of lines across a chart price would hit one of them. Loads of confirmation bias IMO
 
Carrying on from the above comment (Fibs are a Predictive Tool)

Does
anyone else trade using Fibonacci levels?
 
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.
 
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

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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

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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
 
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