Yes it does. But those are support levels once there is a decline.
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DislikedOh and I firmly believe the banks are not trading to make profits.... they are buying Forex future contracts to hedge their country's economies based on fundamentals.... they are exercising the contracts and not selling them for profit. That's why price action is my bread and butter for now.Ignored
DislikedI was first introduced to Fibonacci levels when I read a trading system by Quantum Global. Basically, if there is a "wave" greater than 40 pips in height, you were supposed to play the Fib levels, and filter your trades based on RSI.
I backtested the method for a year or two, and found that it won 50% of the time.
I could flip a coin and have the same results... 50/50.
I realize many traders swear by Fibs.... and yes you can find Fib "patterns" in charts a lot. But how valid are Fibs really? My problem is that I believe too many traders are playing Fibs in different timeframes... consequently a lot of noise in the charts.
Oh and I firmly believe the banks are not trading to make profits.... they are buying Forex future contracts to hedge their country's economies based on fundamentals.... they are exercising the contracts and not selling them for profit. That's why price action is my bread and butter for now.Ignored
DislikedAlmost every one uses Fibs in my opinion wrong. If you really want to undertand the power and use of fib numbers, read DiNapoli's book
The Practical Application of Fibonacci Analysis.
I always thought I was using them correctly, because that is the way all software packages teach, but there is so much more to and Where to place them is not subjective, like I assumed it was.
My eyes were opened by that book.
Just this morning, the Dow futures followed a weekly confluence of a series and bounced at the exact range of that fib confluence... Dopey will know what I mean here, right away...
regardsIgnored
DislikedI am more partial to the way Robert Miner/Dynamic Trader uses fibs. Price and Time fib projections along with the pattern are used to determine market direction.
Is it infallible, of course not. What is? But traders will faithfully follow their favorite MA crossover/Overbought-Oversold indicator/etc thinking that is the way. Good for them. I'll stick with fibs.Ignored