Trading with Fibonacci retracement

dbphoenix

Legendary member
6,952 1,245
Well I respect your point of view and your point about tides is completely valid.

For me evaluating something within a scientific framework gives a good base. Using this for questions that don't have a proof surely is useful?
Very much so. However, very rarely is the scientific method applied to indicators. Rather novices rush toward them as if they were magical. Candle patterns, for example.

Someday someone may come up with an indicator that has value, even if they do lag. In the meantime, I'll stick with trading greed and fear.
 

vanillaman

Member
67 6
What is the statistical evidence to support this contention?
You collect the data yourself, like I said, I am not in defense of it. There was a certain famous trader who visited oracles to get trading decisions. Lol. Anyway, the tool does a simple thing it takes an impulse then measures it. Like anything if that impulse was presumably caused by real money moving the market then any pullback can suggest either a forced liquidation due to new information or the order flow has changed, either way the call is easier to make once the impulse has been corrected to half its initial move. This is just logic, nothing to do with trading, the same principle can be applied to anything. So if you look at fibs in that context this shouldn't really impact your trading. Like in all things you need to have a reason to want to measure and impulse or correction. If not what would the point be?

See! No argument...
 

sacbnc

Junior member
10 1
You collect the data yourself, like I said, I am not in defense of it. There was a certain famous trader who visited oracles to get trading decisions. Lol. Anyway, the tool does a simple thing it takes an impulse then measures it. Like anything if that impulse was presumably caused by real money moving the market then any pullback can suggest either a forced liquidation due to new information or the order flow has changed, either way the call is easier to make once the impulse has been corrected to half its initial move. This is just logic, nothing to do with trading, the same principle can be applied to anything. So if you look at fibs in that context this shouldn't really impact your trading. Like in all things you need to have a reason to want to measure and impulse or correction. If not what would the point be?

See! No argument...
I like your take on this

I think the "my way is right and your way is wrong" paradigm can force people into having conversations that aren't as constructive as they could be
 
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tomorton

Legendary member
7,734 1,101
The discussion reminds me of the fund manager who - after he'd retired! - revealed he'd made his buy/sell decisions based on how many red/green traffic lights he encountered on the weay to the office. If the greens were in the majority, it was a buy day, if the reds had it, it was a sell day.

How successful was this? Well, he survived long enough to retire.
 
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dbphoenix

Legendary member
6,952 1,245
The discussion reminds me of the fund manager who - after he'd retired! - revealed he'd made his buy/sell decisions based on how many red/green traffic lights he encountered on the weay to the office. If the greens were in the majority, it was a buy day, if the reds had it, it was a sell day.

How successful was this? Well, he survived long enough to retire.
There's also the guy back in the 60s who received messages from Mars via a Coke bottle with a scrap of antenna sticking out of it. Enviable success, the key to which was cutting his losses short and letting his profits run.
 

dbphoenix

Legendary member
6,952 1,245
You collect the data yourself, like I said, I am not in defense of it. There was a certain famous trader who visited oracles to get trading decisions. Lol. Anyway, the tool does a simple thing it takes an impulse then measures it. Like anything if that impulse was presumably caused by real money moving the market then any pullback can suggest either a forced liquidation due to new information or the order flow has changed, either way the call is easier to make once the impulse has been corrected to half its initial move. This is just logic...
There's no reason to collect the data unless one has some reason for doing so, other than boredom. As there is nothing logical about any of it, there's no motivation to collect data.

Retracements can be deep, shallow, and all points inbetween. The key to trading them profitably comes from an understanding of the behaviors of the various classes of traders, where "support" and "resistance" lie, and judging the imbalances between supply and demand against the level of activity. Fibs have nothing to do with it, nor does any other indicator.
 

XTX

Newbie
5 0
How to calculate fibo driven volume

Does anybody have an idea on how to estimate volumes traded based on fibo levels by all types of traders? Or are there any surveys that can help to estimate the importance of fibos in FX? If there are not such surveys may be we can organize it among trade2win traders community?

Thanks very much for your inputs!
 
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vanillaman

Member
67 6
Does anybody have an idea on how to estimate volumes traded based on fibo levels by all types of traders? Or are there any surveys that can help to estimate the importance of fibos in FX? If there are not such surveys may be we can organize it among trade2win traders community?

Thanks very much for your inputs!
The guys who run forex live are always referencing Fibs, I know a few multi-million traders who manage a several hundred million and they reference fibs, so I don't think we need much estimating but. I guess you can observe the tick volume at critical fib points. To be honest I am an Options trader, so my risk is lower, so if the market looks shaky at fib level I pull the trigger, I know volatility can be extreme at those levels, can't tell you why but I have tripled my premium many times coming out of daily fib levels. So each to his own.
 

XTX

Newbie
5 0
The guys who run forex live are always referencing Fibs, I know a few multi-million traders who manage a several hundred million and they reference fibs, so I don't think we need much estimating but. I guess you can observe the tick volume at critical fib points. To be honest I am an Options trader, so my risk is lower, so if the market looks shaky at fib level I pull the trigger, I know volatility can be extreme at those levels, can't tell you why but I have tripled my premium many times coming out of daily fib levels. So each to his own.
In 5 trillion daily market even 100 millions are not impressive. Also take into account that

1. Around half of the market is long and the other half is short, and fibos for those will be different by level and trades in opposite direction
2. People draw fibo levels differently by choosing different extreme points on the chart

As a result there will be lots of different levels that are used by small part of market participants (say maximum 5 %) and may be in a different time. Impact of these trades will be very unconcentrated and mainly balanced.

Probably only those levels that enjoy significant consensus among traders will be really important. But the question is how to differentiate those ones from the others.
 

j.n

Member
76 0
Fib is the only thing you need - and that is damn good starting advice for a noob.

Don't believe me? Look at my trading record here on this site. I don't lose. Time-stamped entries and exits... I'm willing to help.
 

j.n

Member
76 0
How about the article below? It shows rigorously that Fibonacci levels have no more significance compared to other levels.


http://forexop.com/strategy/fibonacci-fact-or-fiction/
With all due respect... what is an article vs. real time, actual, verifiable results?

Rigorous? Sure. But all the author is "showing" is they're frustrated they haven't found the proper application of the fib. Call it a myth all you want. The proof is in the pudding.

I'm not writing articles. I'm trading and winning. I've no inclination to break down the article. It is misguided from the onset. Just... Trade.
 

XTX

Newbie
5 0
With all due respect... what is an article vs. real time, actual, verifiable results?

Rigorous? Sure. But all the author is "showing" is they're frustrated they haven't found the proper application of the fib. Call it a myth all you want. The proof is in the pudding.

I'm not writing articles. I'm trading and winning. I've no inclination to break down the article. It is misguided from the onset. Just... Trade.
I don't think the author is frustrated. It is the opposite, he is very confident that fibos are myth. Unless you have robust argument against his research, I am inclined to accept his opinion. Could you please tell us a little bit more how you use fibos?
 

j.n

Member
76 0
I don't think the author is frustrated. It is the opposite, he is very confident that fibos are myth. Unless you have robust argument against his research, I am inclined to accept his opinion. Could you please tell us a little bit more how you use fibos?
While running the risk of sounding rather brash, I'd like to direct you to my trading record on this site. You can find my trades in my member profile, under stats ... I only post in the two threads I have started. I use fibonacci. I've won every trade (well, besides 1... I have posted 1 loss on this site because I was unable to post my exit at the time of exit, and there fore had to "concede" a loss because it would not have been time-stamped.) So, from my standpoint, any notion that fibonacci is a "myth" is rather silly - because I use it, and it works. But might I extend an olive branch here - the presumptive "use" of the fibonacci he's referring to is ineffective and I would thusly say his argument is correct. I find it very difficult to explain how I use fibs without directly exposing my methods. Might I suggest finding another application aside from what the article assumes?
 
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