Fibonacci Retracements

I don't want to continue to stir up this issue and will let it drop right after this post. As an aside, I’m not sure why I’m giving this my time anyway other than to exercise my passion to cure folk of their persistent belief in belief being sufficient in and of itself to induce belief in others.

Lightning, if you check all the points you relate for us ('friend of Freddie II', 'wrote a number of books' etc) you'll find this all comes from the same initial and single source any of us have for all the information we allegedly have on this myth. We have no independent confirmation for instance, that Frederick II ever knew anyone like this. There is no documentary proof or cross-check to substantiate any of the confirmations necessary to establish the existence of this person as having had any physical reality.

Nobody has actually ever seen any of the original documents, only ever handed-down copies of. There is no provenance to support any of it.

I'm not going to venture into the why's and what for's of the basis for the myth and Fibs DO exist for the reason I highlighted earlier on this thread, but I am aghast that so many accept so much without any attempt to substantiate any part of it for themselves.

There is a rule which I can't remember the name of but it basically states that if anything is going to survive more than 7 generations there will be ample evidence from multiple sources to support its provenance from its point of origin. Basically, if you're that good, so many of your contemporaries will talk about you and write about you that your fame will be traceable through a number of independently verifiable routes each of which themselves will be independently verifiable through a similar process. However if you're a small town schmuck that nobody is going to remember after you're dead, or even while you're still alive in some cases, then you're unlikely to have produced anything worth talking about, or it would have been at the time, and in depth. Independently verifiable proof. That’s all that’s missing.

To address the other non-trading issues which is what I was doing when challenged by Sir Joules, check the following.

The Fibonacci numbers first appeared, under the name mātrāmeru (mountain of cadence), in the work of the Sanskrit grammarian Pingala (Chandah-shāstra, the Art of Prosody, 450 or 200 BC).

Check out all the apparent correspondences in nature too. The ‘proportion’ is said to exist in relation to a person’s height and the height of their navel (it doesn’t – that value is closer to 0.58 +/- 0.01); length of forearm in relation to base of palm to tip of middle finger (also out by a country mile for most non-Simians); number of spirals in a galaxy (uh? Most have just two), distribution and numbers of petals and branches (on a few, but not the vast majority of plants and trees), nautilus shells (actually not, if you check the detail), proportion of distance of the planets from the Sun (providing you miss one or two and give up after Mars and forget Mercury as well).

Really, there is just so much tosh talked about this subject and Trendie is right, if some use it for trading and sufficiently so for it to be a tradable phenomenon then use it – which is what I believe I said right back at the beginning. Just don’t get conned into all this rationalising hype generated in an attempt to give it credibility it doesn’t warrant. This is cognitive dissonance at its best.

Sir Joules, thou art a brave and able knight, but your lance is broke, thou art unseated from your steed and I fear you are undone. But be of good heart and know well, your fate was sealed long before it was begun.

Adieu.
 
Fibs don't tell lies

I'll bet he doesn't believe in Father Christmas or read Harry Potter.:LOL:

Out of interest let's see what kind of retrace ES has today after its stumble of yesterday.

Current price 1528.50

.618 retrace = 1540

.500 (I know it's not Fib) = 1536.25

.382 = 1532.5
 
Leo - 1 Bramble - 0

I'll bet he doesn't believe in Father Christmas or read Harry Potter.:LOL:

Out of interest let's see what kind of retrace ES has today after its stumble of yesterday.

Current price 1528.50

.618 retrace = 1540

.500 (I know it's not Fib) = 1536.25

.382 = 1532.5

:!:
 

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"Let it drop after this post"...or not as the case may be. Flexibility is key.

And you traded that move did you Rols?

There are two key things to recognise here.

1. Lots of people TALK about trading fibs and can paint pretty pictures in retrospect of where they worked to the absolute Nth. Far fewer actually trade them than talk about them, even when they claim they do.

The thing is, if you were a pure Fib trader and you were just waiting for that bottom on ES to form, at what point would you have satisfied yourself it was a bottom and not just a breather? And by the time it had confirmed itself to you as a bottom, where would the price then have been? And how much confidence would you have had in each of your Fib levels being hit on the way up? How much reward was on the table for that move given the point from where you would realistically had got in had you really been trading this? And at what point would you have recognised that the move was (a) falling short of that first fib level (b) going to the next fib level (c) going against at that fib level and what would that have made your R:R for that trade? Did you calculate that all in advance? Expect it? Plan for it? Actually trade it?

You use a lot more basic TA even when ‘just’ trading Fibs than you might have previously considered, or you’re not trading for long.

That’s my key point No. 1 – Lot’s of people show you the perfect top/bottom and the precise turn on a sixpence that Fibs provide – in retrospect – and without stating which of the fib levels had what level of probability of being hit – and without any recognition of the normal confirmations real traders take at the front and back of a trade that take a healthy lump out of any move. Basically, it ain’t that much sweeter than any other setup. It’s only when you really try and trade this do you get these realisations. Try it one day.

2. The two major problems it would seem some members of these boards have relate to temporal incontinence – they can’t hang on to the end of a post or thread to the end without compiling a response in their head, if not on the keyboard directly. Hence, most of what was written gets missed and usually, the central point is a major casualty. They then proceed to form a ‘response’ to what it they wanted to say all along rather than any recognisable response to what it is they are apparently responding to. So Rols, check my posts above and let me know where I’ve made any indication of my position other than Fibs do work in the markets. The entire focus of my posts have been that they do exist and more importantly in my view, why they work. My attack has been on the wholesale tosh about how Fibs apparently appear and apply in so many other unrelated fields. The other problem which I am now convinced affects many relates to temporal relevancy. Only that which is discussed today is relevant. That which was discussed yesterday has far less importance. Even, or perhaps especially, if there were unresolved understandings or incomplete comprehension. Rather than chase those issues down to resolution, which is the ultimate aim I would have thought, they are let go as uncomfortable challenges to continued concentration and focus. Give us more sound bites, preferably with the code.
 
For me, Fib retracements, just like any indicator, can and do work well sometimes - by holding. At other times they do not work well - as the fib retracement levels fail.

The reason why i have indicators that i prefer much more than fibs is because, well, i'm quite lazy -
A) you have to draw fibs on the chart.
B) you have to chose which fib level to pay attention to.

There is a subjective decision making element. If this subjective decision making element led to a higher % of correct calls, then it might be worthwhile IMO. But for me, fibs require too much effort!

Fib retracements for me, are something i'd probably not feel confident trading off. But they do look pretty on a chart - AFTER the event!
 
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2. The two major problems it would seem some members of these boards have relate to temporal incontinence – they can’t hang on to the end of a post or thread to the end without compiling a response in their head, if not on the keyboard directly. Hence, most of what was written gets missed and usually, the central point is a major casualty. They then proceed to form a ‘response’ to what it they wanted to say all along rather than any recognisable response to what it is they are apparently responding to................

True.

Especially when members right a mini essay ;) .
 
...................... Basically, it ain’t that much sweeter than any other setup. It’s only when you really try and trade this do you get these realisations. Try it one day....................

.

Amen to that. In my experience nothing "works" with any certainty, but many things give a "reason for entry" following which managing the trade is key (but that's another story :) ).

So far as Fibs are concerned I think they are a useful indication of where to start paying attention. For eaxmple, if you are wanting to play trend continuation (potential) after retracement then the fib levels give useful indications of where to zero in on the action as the price enters those (potential) "killing zones".

Good trading

jon
 
1. Lots of people TALK about trading fibs and can paint pretty pictures in retrospect of where they worked to the absolute Nth.


That’s my key point No. 1 – Lot’s of people show you the perfect top/bottom and the precise turn on a sixpence that Fibs provide – in retrospect – 2.

The two major problems it would seem some members of these boards have relate to temporal incontinence – they can’t hang on to the end of a post or thread to the end without compiling a response in their head, if not on the keyboard directly. Hence, most of what was written gets missed and usually, the central point is a major casualty. They then proceed to form a ‘response’ to what it they wanted to say all along rather than any recognisable response to what it is they are apparently responding to. .

At 2:32pm yesterday I posted

Out of interest let's see what kind of retrace ES has today after its stumble of yesterday.

Current price 1528.50

.618 retrace = 1540

.500 (I know it's not Fib) = 1536.25

.382 = 1532.5

At 3:30pm ONE HOUR LATER a chart was posted showing the above suggested .382 retrace.

In which way exactly is this retrospective?

Temporal incontinence? Physician heal thyself!
 
.500 (I know it's not Fib) = 1536.25

Rols, if you have 1 contradiction, nothing can be believed. It is no coincidence that 50% is included. It's because THAT is the real golden ratio in trading.


(50+100)/2= 75%
(50+75)/2= 62.5%
100/2 = 50%
(25+50)/2 = 37.5%
50/2 = 25%
25/2 = 12.5%

The above percentages will appear on charts more regularly than any FIB level, and for very good reasons.
 
I know most of you are non-believers and it may open a can of worms again.... but they just keep happening whether you like it or not. Take a look at the GBP levels. Not that I think it's now the low for the day and wont get taken out. As I've always said these things are pay-attention points, not put your mortgage on it (oh and I do have a Northern Rock mortgage so wont be messing with mortgages at all! :eek: )

I'm not using fibs as much as I used to, just plain ol' price which is serving me pips each day so mustn't grumble!

Anything left to comment on here... probably not. It's all just opinions and edges after all.

All the best
 

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I know most of you are non-believers and it may open a can of worms again.... but they just keep happening whether you like it or not. Take a look at the GBP levels. Not that I think it's now the low for the day and wont get taken out. As I've always said these things are pay-attention points, not put your mortgage on it (oh and I do have a Northern Rock mortgage so wont be messing with mortgages at all! :eek: )

I'm not using fibs as much as I used to, just plain ol' price which is serving me pips each day so mustn't grumble!

Anything left to comment on here... probably not. It's all just opinions and edges after all.

All the best

good post PM..........a qed thing eh? I hear you saying that maybe the issue is about the extent of dependance...........not necessarily the proof of probability..........

Joules

btw ...........the phones on.........:p
 
I know most of you are non-believers and it may open a can of worms again.... but they just keep happening whether you like it or not. Take a look at the GBP levels. Not that I think it's now the low for the day and wont get taken out. As I've always said these things are pay-attention points, not put your mortgage on it (oh and I do have a Northern Rock mortgage so wont be messing with mortgages at all! :eek: )

I'm not using fibs as much as I used to, just plain ol' price which is serving me pips each day so mustn't grumble!

Anything left to comment on here... probably not. It's all just opinions and edges after all.

All the best

Look at the low of the day = 2.004
Look at the high of the day = 2.036

(2.004 + 2.036)/2 = 2.02 (50% which IS NOT a Fib number)

Where is the market near the end of the day??...Around 2.02

Magic numbers are everywhere! :eek:
 
I might even be bold enough to say that the next "magic level" could be 2.012. In any case, I would like a FIB FANATIC to tell us now what the next level will be. It's easy drawing pretty lines AFTER the fact.
 
In any case, I would like a FIB FANATIC to tell us now what the next level will be.

In your own words, why should they?

If a trader has an edge that they have discovered through assiduous study and practice (as opposed to a weekend of curve fitting), an edge that consistently wins money on balance and withstands the test of time, why would they give it away simply because the person asking isn’t making enough money from their own system? It doesn’t make any sense..
 
I know most of you are non-believers and it may open a can of worms again.... but they just keep happening whether you like it or not. Take a look at the GBP levels. Not that I think it's now the low for the day and wont get taken out. As I've always said these things are pay-attention points, not put your mortgage on it (oh and I do have a Northern Rock mortgage so wont be messing with mortgages at all! :eek: )

I'm not using fibs as much as I used to, just plain ol' price which is serving me pips each day so mustn't grumble!

Anything left to comment on here... probably not. It's all just opinions and edges after all.

All the best

fractal termination on a fib............with exhaustion fairly clean...........reversal of 2 degrees of trend........probably 3
 

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Anyone else notice the level of that first 100% retracement level on the FTSE ... 6,180. Spooky...
 
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