Fibonacci Retracements

ChartMan

Legendary member
5,580 46
For anybody that needs convincing that these magic numbers really are useful, take a look at Brewin Dolfin.
I would say that the money's in the bank....
Chart attached to help.
 

Attachments

  • brw080601.gif
    brw080601.gif
    13.3 KB · Views: 1,497
  • Like
Reactions: JTrader

esiotrot

Active member
157 0
I too like Fibonacci
Is that a bearish divergence on RSI?
Suggests retrace to 140 before onward and upward?


Peter
 

RogerM

Established member
752 6
Anyone who doubts the power of Fibonacci have a look at the attached chart of Kier group KIE. A grid drawn between the high of 18.01.2000 and the low of 25.05.2000 projects each pause up to the recent high, and also the retracement in Sept 2001, which was also the 38% retracement of that move. Awesome.
 

Attachments

  • kie010402.gif
    kie010402.gif
    16 KB · Views: 5,628

FTSE Beater

Experienced member
1,518 4
Hi all.

I still need convincing on the issue of Fibonacci with shares, I've seen it clearly work on the Dow and I have no problems with the concept.

Take the example of Kier finding Support at 395, it had already been strong resistance before, so I believe the retracement to 38% was merely a Support and Resistance switch.
I would love to be proved wrong on this, but as yet I still need to be convinced.
 

RogerM

Established member
752 6
Hi FTSE Beater - Surely the key point here is that the 395 support level was previous resistance at the 161.8% projection for KIE, and was determined in May 2000. So the support at 395 was caused by a Fib level. The next projection was 261.8%, and 38.2% retracement from there took KIE back down to the previous resistance (now support) at a key Fib level.

And how do you account for the next extension running to the next Fib level at 423.6% at 670. Not coincidental surely?

I would agree tho' that suport or resistance at key Fib levels is more powerful if there is evidence of previous S/R at that level. I'm always looking for independent confirmation.
 

FTSE Beater

Experienced member
1,518 4
Hi Roger

I had heard that Fib no.s go beyond the 100% mark, but I've never seen it in action before (I didn't see the 1st set of Fib no.s), so thank you very much for pointing this one out. :)

I've had a quick look at other random charts to see if it runs true with others, and it does seem to run true, especially for picking break-out targets. I'm still not 100% convinced, but having said that if a share breaks-out and stops at a Fib level and starts to reverse, I'll pull the trigger there.

 
Last edited:

ladybird

Newbie
4 0
The power of Fibonacci? My jury's still out on this one - maybe it's because I don't have access to an online auto-chart calculator!

So I created a spreadsheet which would allow me to enter a range and it gives the fib projections.

Anyway, my point is that tonight I entered in the range from the September low (8062) and the previous high (11350) and it threw up a 61% retracement figure of 10093 from that low.

Then I entered in the more recent low (9503) and high (10683) and it came up with a 50% retracement figure of 10093 from that low.

What might this imply? Or is it just a coincidence?
 

ChartMan

Legendary member
5,580 46
It tells me that that's where the dow's headed, and also you should post more. :)
 

Priceman

Established member
757 84
For Wasp...fibtastic action!

Now I know there are a lot of people who don't believe the hype but I am a follower of fibs and do rate them more than a lot of other indicators. That's not to say I don't use other indicators, but as with all things that's just what they are; indicators, meaning I use them as guidelines not laws to abide by always. As I am mainly an FX trader then I've concentrated on that for this exercise. If I have time over the weekend I'll add some charts for indices like DAX and DOW.

My chosen subject for the exercise is cable and unfortunately it's gone ballistic at the moment and I don't have charts that go back far enough to see previous support/ resistance levels from 26 years ago. This is making things a little more difficult for me to predict where cable may go but I'll just go with the trend till it's end :rolleyes: yukky quote I know, so tacky!

Maybe Socrates is a secret fib follower when he states 'everything is know in advance'... ;) It certainly does seem this way when you see how fib levels can work. Maybe he'll post some wise words to help this exercise along to prove how things are known before the event.

The charts show where moves went and how they adhered to fib levels. I know there can be 'fitting' of levels after the event but what I am trying to do is use them to predict what 'could' happen in the near future. Obviously when a move gets going it does take some stopping to reverse it (wonder if anyone knows exactly how much money comes into cable for instance to stop it dead in it's tracks and reverse? $10mill, $20mill, $100mill?) if there is strength in that move. This means that sometimes prices runs on past the fib level before retracing.

Next problem with fibs is how to decide what the important price levels are, on which to place the 0% start and 100% finish levels. Here I am trying to look for where the big institutions come in to move the price and how far they take it before changing it's direction. I start with the larger timeframes like daily or weekly then move down to hourly. I finish the fib useage there on the hourly and go to 5 minutes to look for possible future support/ resistance levels. In up moves I am looking at retracements and take the low of the retracement to the previous high, then extend the fib to the 161% level. In down moves I look for the inverse; ie the high retracement to the low and extend the downmove fib level. Hope that's clear? With the charts I think it should be.

On my fibonacci levels I use the 78.6% level which a lot of others don't use. I do remember also seeing 76.4% I think, so this marker is maybe a bit less useful than the usual 23.6%/ 38.2%/ 50%/ 61.8%. I'd be interested on views here too.

Also as price 'value' changes every day/ hour/ minute depending on the fundamentals and economics behind the chosen market the fib levels need to be adjusted to go along with the change in sentiment towards that market.

Maybe other fib fans can add some charts for discussion. Let's hope at least I can get Wasp to consider looking at them as useful indicators! :cheesy:
 

Attachments

  • fibonacci in action 2007.JPG
    fibonacci in action 2007.JPG
    201.9 KB · Views: 690
  • July 2007 fibs.JPG
    July 2007 fibs.JPG
    186.9 KB · Views: 386
  • July 2007 fibs (2).JPG
    July 2007 fibs (2).JPG
    201.5 KB · Views: 376

Lightning McQueen

Moderator
4,916 780
Nice post priceman, I do hope it generates discussion.

Rather than use all the levels I go for one only, if supported by the charting software. For me im quite taken with the 61.8% level, using this to detect failures to drive prices higher or lower, I have currently lost the source of this strategy, when found I will post a chart illustrating the point. Will Dow be ok?

As for unbelievers, well once a sceptic, always a sceptic, I dont believe peeps change their views, unless of course someone comes up with a foolproof strategy based on fibs & posts it...which could be foolhardy but thats another subject...then watch the leopards change their spots, quick smart.

Maybe Socrates is a secret fib follower when he states 'everything is know in advance'... ;) It certainly does seem this way when you see how fib levels can work. Maybe he'll post some wise words to help this exercise along to
prove how things are known before the event.

I don't believe we will ever know what he's thinking or up to, for if anyone actually comes up with the right post sussing it all and taking away the hobby horse, they will be severely dealt a "no thats not it" reply, swiftly transported by "beyond right hard edge" technology to a galaxy far, far away known as "yonder place" put in a chamber, stripped of all worthwhile trading knowledge, weened off current diet of banana, then let loose in the wild to rant about the place they've just left...hmm, nice.:eek: :LOL:
 

Paul71

Senior member
2,056 412
Nice post priceman, I do hope it generates discussion.

Rather than use all the levels I go for one only, if supported by the charting software. For me im quite taken with the 61.8% level, using this to detect failures to drive prices higher or lower, I have currently lost the source of this strategy, when found I will post a chart illustrating the point. Will Dow be ok?

As for unbelievers, well once a sceptic, always a sceptic, I dont believe peeps change their views, unless of course someone comes up with a foolproof strategy based on fibs & posts it...which could be foolhardy but thats another subject...then watch the leopards change their spots, quick smart.



I don't believe we will ever know what he's thinking or up to, for if anyone actually comes up with the right post sussing it all and taking away the hobby horse, they will be severely dealt a "no thats not it" reply, swiftly transported by "beyond right hard edge" technology to a galaxy far, far away known as "yonder place" put in a chamber, stripped of all worthwhile trading knowledge, weened off current diet of banana, then let loose in the wild to rant about the place they've just left...hmm, nice.:eek: :LOL:

Howdy!

Look at a chart, LM. Look where price stops, where indicators are not, because price has not been there yet, the void, the future, the unknown, a mythical place of Black Swans and where pots of gold lie in wait....

Seems void of information doesn't it?

It's full of information.

Unfortunately, you are not allowed to view this info, and niether is Soccy.

All things fit sometimes, what a folly eh?

Sorry for ranting, LM. :) .
 

jacinto

Senior member
2,374 101
Maybe other fib fans can add some charts for discussion. Let's hope at least I can get Wasp to consider looking at them as useful indicators! :cheesy:

good post priceman. i have never considered them indicators myself, but guess that is a different discussion.

I like them for targets on measured moves, but not so much for retracements.....although at times they seem to be good. My preferred use for retracements are as a complement of other events and used more as a confluence (i.e. say, a retrace gets to a 61% where price has happened to print a congestion, or a hammer, etc.)

j

edit....look at the example for euryen....breakout, pullback to 50% but also to previous resistance.....so which was it, 50% or resistance turned support........i dont want to answer that. but see it as a confluence of events
 

Attachments

  • pricemen.gif
    pricemen.gif
    11.9 KB · Views: 327
Last edited:
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock