Fibonacci insights

Hello and welcome to this thread!

If you want to know how to draw a proper Fibo study, including, of how and when to renew/redraw an existing Fibo study, please read on.

This thread is for you!

EDIT: As per post #14 & #28 I'm attaching herewith the aforementioned Swing Indicator, as well as, the MT4 Fibonacci Tool Code settings which you'll find attached in a Notepad.txt file named ''MT4 Fib Tool Code Settings''.

In order to upgrade your standard MT4 Fibonacci Retracement Study Tool these steps need to be taken, as follows:

Start your MT4 > then on top left, go to ''File'' > Scroll down to ''Open Data Folder'' > locate the ''Config'' folder > then, locate the ''terminal.txt'' file, open it and add all of the text code as per the attached txt file, as is, no need to delete or add any spaces, it's just a straight forward and simple copy & paste procedure.

Paste the copied code of text between [Objects] and [Settings]. Then, once the code text has been added/replaced into the MT4 terminal Configuration Settings-File, save that file and restart MT4. You'll now find that when drawing the Fib tool that all Fib levels and the correlating text labels will be present.

Please note: you already may have some other Objects Fibo_code present within your terminal-file, in such case delete/overwrite any of the existing text code and replace with the code text from here. Please see post #48 for further assistance if you have any problems with adding this code.

One hand up

Always interested in hearing other peoples insights.

count me in

Brilliant vibes in here - Thank you everyone! (especially pipmutt - LOL)

OK. Lets start with a small intro:

Markets move in a certain (wave) pattern. We all know that; it is our task to find and isolate those none random price patterns and profit from them - it's all about probability.

(side note) It makes no difference what time frame you set for yourself for trading, the 1 minute chart is the noise from the 5 minute, and the 5 from the 15 minute etc. etc. - it's up to you to decide where you set your own personal 'noise level'.

NOW, lets think:

Traders have a choice of 10's of different price feeds available; there are different charts and interpretations of isolating, those so important to Fibonacci, swing high/lows; different interpretations of isolating corrective and impulsive moves; or, the burning question and question of it all perhaps: when to draw a new Fib study in case of the market making a new high/low and to exercise this task in a consistent manner?!

One thing though, let us not be fooled in anyway: the markets cannot be boxed in or put in a frame - in anyway – ever.

But nonetheless:

the quest of any trader is to find a tool/method that is providing a framework that can and is able to feed him with information that he can utilise and thus can make head and tales out of the markets.

Fibonacci is such a tool (among others of course) that can provide you with many, many answers and solutions. If properly shown and taught especially to the one with little or no knowledge would be a taken back I think.

... see more in Part II

Welcome back!

It is a good idea to keep your charts - and 'your variables' of your applied tools to them as constant as possible; and therefore in order to achieve such you must:

- find a tool that provides you with a consistent way of isolating swing highs/-lows

- find the answers and ponder on all of the following:

a: if, and when to no longer adjust your current swing high/low

b: therefore and as a direct consequence once a swing high/low has been set and established, when would then be the appropriate time to abandon this previously established swing and move on to the next updated and new market price swing.

little hints:

ever heard of an ' orthodox top/bottom ', no? Well, consider this: price can make - and does make most of the times, new high/lows - nonetheless, the existing previously isolated swing stays in place until...(more to follow)

Basically, the question you as a Fib trader you want answered is this: when do you isolate and determine and set a new swing? (this is the big question, once answered and mastered {its easy and that's what partially this thread is all about} you will see the markets in a completely new perspective).

For those with some EW knowledge, I'll put it this way: a ' B wave count ' can/does go over a impulse count wave 5, can't it/doesn't it? Right.

Next:

Fib ratios:

Have you ever thought really hard about the whole Fibonacci concept? What does it all mean? Why only 61.8, 23.6 etc. etc.? Some traders like to buy into weakness and sell into strength, some will wait for conformation while others will risk more/-gain more by trading more aggressively etc. profound understanding and knowledge of Fibonacci will answer all sorts of questions.

Have you heard of the {0./1. +/- 1272} Fib ratio? Some, or most of you have, some of you will say some Fib ratios are correct and some are nonsense ... let me tell you, there are many more (Fib) ratios, we need them - find them - Otherwise it would be like watching a movie with only every other picture-frame being projected onto the screen - no good of course - because you're not getting the full picture and story of what is happening.

The market keeps telling a story, to which we don't know - and actually don't need to know the ending - no one does. The story unfolds and probability plays our part - certain things are meant to happen at certain price constellations and price actions - and if they don't for whatever reason, then something else is probable to happen – it's all about exploring and finding...

Part III to follow soon...

Room is open to questions and comments

Nice start

In fact i do not use any fib-based system in my trading. I tend to trade by EA so i need system that can by formalized. By now i don't have any idea how to spot fib patterns automatically, so i'll be glad to hear you experiance in this field. Hope you will add some charts in this thread.

I trade on daily charts and i mostly trade price action patterns.

Welcome back all to Fibonacci insights - Part III


Lets talk about now the Golden Ratio/Mean or Phi which is of course the so famous 61.8 number and the 'missing bit' or the missing sibling which has to be of course the 38.2.

Those are two big numbers. Major players. Common knowledge, right? Yep, right.

OK. Lets take matters a bit further, you'll see that this will be like putting the dot on the 'i' or writing the 0 behind the 1.


Our understanding is as of now that we can have price going over/under the previous price swing, but still, this previous swing will remain as our main measuring wave for Fibonacci purposes so that we may calculate off such our Fibonacci - Retracements, Extensions and Projections. Good.

However, the question is now and still remains: for how long? For how long, or better said: how much would price have to extend or go over/under the previous old swing in order for us to establish that this very latest price move/price wave will serve as our new main Fibonacci Price Swing?

Yes, you are probably guessing already where I am going with this having read the above intro just a moment ago...

Correct, it is the 'missing bit number'.

The answer is simple:

The Formula for applying and drawing a proper Fibonacci study would be:

'' The very price wave that is responsible for extending more than 38.2% over or under the previous established price swing shall be taken as the new (and I call it) Parent Fib ''.

Yes it's that simple. End of story.

- Well, what does it all mean now?

- How do we put all of this simple knowledge together?

- And how can we put this into practice?

- How do we find a consistent way of isolating a price swing with keeping discretionary application of such to an absolute minimum?

- Does this formula work in all time frames and markets?

- How many Fib levels are needed?

- And if we apply more than the normally standard fib lines, will this not be confusing?

- Sometimes I see so many Fib retracement/expansions drawn on one and the same chart, is this the case here too? (I can tell you that now already, I do not use Fib clusters, no need for this at all and no need to make matters even more complicated).

Well, I think all of these questions and more of course would be best answered by posting some charts and to show some hands on applications.


I'll do that soon, in Part IV.

In the mean time, any questions fire ahead please.

very intersting. Please keep posting

Part IV - Practical application - putting the theory into practice.

I hope that you have enjoyed my little intro, I tried to keep things as short as possible.

I would like to start posting some charts in order to show you, and so that you may see for yourself the following:

- The Full Version standalone Fib Tool.

- A well known tool/indicator used in order for us to consistently isolate price swings. (this one happens to be programmed very well indeed by IgorAD , I will attach it {as well as the Full Version Fib Tool} later onto post #1).

- And finally, some actual chart samples - for the coming demonstration here I will use EURUSD 1H charts - but this methodology works of course on any timeframe or on any currency pair or market.

>

>

>

Previously on 24 errr, sorry, previously on the first sample we have a ' down-Fib ' now that has turned into an ' up-Fib '.

...once a ' Renew Fib old INVALID ' target has been reached - it is time to turn/switch the Fib tool around - or in case of a no trend reversal to adjust the Fib further down or up.

>

>

>

as you can see - the market extending very drastically.