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Fibnacci trading..Are U thinking what i'm thinking?

  • #41
  • Edited Jul 24, 2007 1:28pm Jul 23, 2007 9:57pm | Edited Jul 24, 2007 1:28pm
Quoting megadave5000
Well, it appears that I am fighting a losing battle here!

Thank you all for a great discussion - I am greatly enjoying your posts and responses to my "randomness" arguement. Thank you for being thoughtful and not nasty - the folks on FF are truly awesome!


Talk about walking into the meat grinder!!

-=DAVE=-
It's all in good fun man.

It's all about having good conversations and stating each one's opinions.
That's the best way to be exposed to different ideas and points of view. And ain't that the main goal of this forum? For all of us to learn new things.

Take care guys,
Tom
  • #42
  • Jul 24, 2007 2:09am Jul 24, 2007 2:09am
I don't attack people, only beliefs....people have fists to hit back with!


Just kidding

But similiar to what Mike said, we're just explaining what we believe in and see work for us every day. Trying to disprove your own reality is sort of self-defeating

My main emphasis on all this is to show people that they aren't fighting ghosts in the fog and they need not gamble. A lot of times this will come across brash, harsh sounding, possibly arrogant or too self-sure. Which I can all live with as long as it makes people think for just one second "but hmmm, if he's THAT sure of it, maybe there IS something to it and I don't need to randomly throw money on and pray and hope and instead trade with a SYSTEM, a PLAN and a STRUCTURE"...

If so, that'd be wonderful

No offense against Dave, obviously, he's already gotten the Avatar idea from my ranting ;d
Trust price. Know yourself.
  • #43
  • Jul 24, 2007 4:04am Jul 24, 2007 4:04am
Hello to you all,

what I am about to tell you all will come as a suprise as it did to me when I started to discover it. You can predict the exact price of the market to virtually the pip + or - 6 pips.

You use fib levels to do it simple, but you must measure the correct waves and project them from the right point, usually last big swings high or low, do this on a day chart, then go down a time frame say 60 mins and do the same thing. You will get fibs hitting on the same level, always very good for a trade set up , but not on its own.

Fib works on price and....time yes it does, so you can project in time where the wave might end and possible price levels, now if you combine that with cycles, you start to get a possible place for the cycles to end and the fib levels to match up to the day. Combine that with larger time cycles and a sprinkling of elliot theory and you can predict wave ends to the day.

I have done it a quite a few times on different markets, they are all the same. I can say the markets are not random as if they were I would not be able to do this.

I am even prepared to do this to put it to the test.

Smalldog
  • #44
  • Jul 24, 2007 4:22am Jul 24, 2007 4:22am
This debate regarding fibs and how they might be a self-fulfilling prophecy because everyone and their mother follow those levels has spurred another off-spring thought: Elliot Waves. They are SO subjective and so easily be drawn differently by each trader that, in my opinion, their value as a T.A. tool diminishes greatly.

- We're in wave iii
- No wait, that's correction B
- You reckon mate?
- Well, I dunno, looks like it doesnt it?
- Hmmmm let me have another look...

A pivot point is a pivot point. A round number is a round number. A 50% fib is a 50% fib. A double top is a double top. But Elliot Waves...
  • #45
  • Jul 24, 2007 4:31am Jul 24, 2007 4:31am
Quoting smalldog2
I am even prepared to do this to put it to the test.

Smalldog

I'd like to know whether 2.0650, 2.0700, 2.0750 or 2.0800-830 will mark the end of the current impulsive wave for GBPUSD, what day to look for it and how much % of the 1000ish pips will be retraced before the next impulse. That'd be cool =)


As for WTB's opinion: there's an observable 1-2-3 pattern for the start of EW impulses and you can do counting quite okay on weekly and monthly sometimes. The thing that's just plain silly is trying to find a count when there isn't one totally apparent and having 50 alternatives.
But really?
Most of the time I personally find myself saying "great, we moved over 400 pips in a straight line, I guess NOW we know we're in an impulse wave".
That's about 0 help if you weren't in from the first 50 pips on
So I believe the waves exist, just no idea how practically tradeable they are to me as an individual trader ahead of time.

But it's okay for me as a "where are we" and "how is the market going to behave" navigator. Corrections are ugly chop = you need lower targets, impulse waves are strong and barely retrace = don't ditch your positions after 50 pips. That sort of thing.
Not "were in subwave 4 at the W and the X will prolly be at...er...." ;P

If you check my monthly EURUSD chart I posted to Traex's thread it is EXTREMELY simplified counting. Anything else I believe is shenanigans and the whole thing not tradeable if you don't have a pretty darn good nose for it and experience. And are NOT overcomplicating it.
Trust price. Know yourself.
  • #46
  • Jul 24, 2007 4:47am Jul 24, 2007 4:47am
There are plenty of scientists making money from the 'Randomness' argument. Then we come to Chaos and Complexity -non-linearity theories which are somewhere between randomness and predictability theories. Causality taking a number of possible routes to affect. Plenty of money to be made here too.

And to those forex 'educators' (Marketeers), the randomness argument is used as an alternative to tech analysis. They ask you to make a 'paradigm shift'! And of course the techies have had their day and still are.
  • #47
  • Jul 24, 2007 7:07am Jul 24, 2007 7:07am
Quoting WTB
This debate regarding fibs and how they might be a self-fulfilling prophecy because everyone and their mother follow those levels has spurred another off-spring thought: Elliot Waves. They are SO subjective and so easily be drawn differently by each trader that, in my opinion, their value as a T.A. tool diminishes greatly.

- We're in wave iii
- No wait, that's correction B
- You reckon mate?
- Well, I dunno, looks like it doesnt it?
- Hmmmm let me have another look...

A pivot point is a pivot point. A round number is a round number. A 50% fib is a 50% fib. A double top is a double top. But Elliot Waves...
Couldn't have said it better.

Elliot waves, imho only appear to work on the large timeframes
100% of traders are losers. Just that some win more than they lose!
  • #48
  • Jul 24, 2007 7:48am Jul 24, 2007 7:48am
Quoting Mr demark
I've been fascinated with fibo's since the day they started working for me.

I normally enter on a 61.8/38.2 retracement once i see a candlestick formation.

but after reading trader888's post i am now wondering if fibonacci methods work or do they only appear to work

why am i saying this?

well, if fibo's are mainly used in conjunction with the trend, then buying/selling at fib#'s is really just entering a trade in the direction of the trend at a supposedly "cheap" price.

in an uptrend, we normally enter if the down retracement has died out (candles getting shorter and reversed) and if it is at a fib#

So i am wondering if it is just that the price is cheap or is it aesthetics?
My main concern is, where do you place the beginning of your fib line and when do you erase and redraw it after a move? it seems you just have to arbitrarily pick a spot that appears to be the bottom or top to the current price, or does it all depend on the time frame you are using?
  • #49
  • Jul 24, 2007 8:22am Jul 24, 2007 8:22am
Quoting pipul8r
My main concern is, where do you place the beginning of your fib line and when do you erase and redraw it after a move? it seems you just have to arbitrarily pick a spot that appears to be the bottom or top to the current price, or does it all depend on the time frame you are using?
the bigger the TF the more accurately u get Tops and bottoms.
So i guess your answer is TF.
100% of traders are losers. Just that some win more than they lose!
  • #50
  • Jul 24, 2007 8:33am Jul 24, 2007 8:33am
Quoting pipul8r
My main concern is, where do you place the beginning of your fib line and when do you erase and redraw it after a move? it seems you just have to arbitrarily pick a spot that appears to be the bottom or top to the current price, or does it all depend on the time frame you are using?
In my opinion, fibs only work in clear trending charts with well-defined swings where swings are clearly identifiable. As a general rule of the thumb, if you cannot draw clearly your fibs, then it loses most of its validity and thus no point in drawing them.
  • #51
  • Jul 24, 2007 8:48am Jul 24, 2007 8:48am
Quoting mbqb11
Dave forgive me if you felt attacked, or anything. I just felt the need to state what I have come to learn, know, and make money with. And it is only meant to be taken however one wants to take it. Like anything else, everyone gets what they want out of the market.

I was just offering my views also. Wasn't meant as any type of attack,

Thanks for your contributions,
Mike
No need to apologize! I didn't feel attacked, I went to bed thinking that I should have used a different word than "attacked." More like.....stir the pot? Hehehe!

Anyway, I really appreciate your responses! You've always taken an interest in my posts since I started blabbing here on FF and I respect your opinions (nearly) as much as my own!

I have some work to do the next couple of days, so I may be absent on the forum for a bit, or maybe not, we'll see how it goes - but I'll be back. Don't think I took anything the wrong way - I am quite enjoying our discussion! I just didn't have much time to post anything else last night but my "prediction" about creating a hoot with my randomness assertion.

Have a great one Mike - I'll talk to ya soon!

-=DAVE=-
  • #52
  • Jul 24, 2007 8:52am Jul 24, 2007 8:52am
Quoting moneybags
It's all in good fun man.

It's all about having good conversations and stating each one's opinions.
That's the best way to be exposed to different ideas and point of views. And ain't that the main goal of this forum? For all of us to learn new things.

Take care guys,
Tom
I absolutely agree! In fact, I'm quite honored that I got you and Mike involved in a discussion - you're two of the most respected members on FF!

All I meant to say was that I knew when I made my randomness assertion that I was opening up the door to a fury of debate - and I'm glad we're talking about it. I quite enjoy a good conversation like we're having here.

Anyway, same as I told Mike above, this week I'm going to be kinda busy, so I might me in and out - I don't want you to think that I'm not reading your responses with interest and thought. I just might not have the time right now to respond properly. Thanks for your posts!

-=DAVE=-
  • #53
  • Jul 24, 2007 8:52am Jul 24, 2007 8:52am
Quoting WTB
In my opinion, fibs only work in clear trending charts with well-defined swings where swings are clearly identifiable. As a general rule of the thumb, if you cannot draw clearly your fibs, then it loses most of its validity and thus no point in drawing them.
bingo. And why this is true is because u need traders all over the world (or at least big dogs, to be drawing the same fibs you are drawing. That's why fibs work
100% of traders are losers. Just that some win more than they lose!
  • #54
  • Jul 24, 2007 12:40pm Jul 24, 2007 12:40pm
Hey Mike -

I thought I'd get back to ya today! I have a little time so here goes....

Quoting mbqb11
Just because something can not be predicted with 100% certainty does not make everything completley random.
Quite right by your verbage. Essentially you are saying, by simplification, that just because I cannot predict something precisely doesn't mean it is random. I agree - as I said before causality is extremely hard to prove. Relationships and associations between things less so. But, I think we should be careful what causes we ascribe. Things always look perfectly explainable in hindsight.

I assert that an event can have reasons and causes but still be random in nature. That is all I'm saying.

Quoting mbqb11

I am not trying to change your beliefs because it really has no effect on me. But I trade everyday based on the fact that the markets are not 100% random.
We are both trading according to our beliefs. After reading your responses, I think that we agree more than we disagree. Again, I did not mean to imply that there is 100% randomness exhibited by financial markets - I simply mean that there is a lot more random chance out there than most people want to admit.

Every trade I make has a stoploss because even though I may choose a direction, I cannot be 100% certain of that direction due to the unpredictability (randomness) of the market. And I won't have any knowledge of my wrong-ness at the time I put the trade on, but it will be painfully evident when I am stopped out. As with you, my bankroll is also positive so I think I am doing something right as well.

Or, as I think is the more likely cause (causality being very hard to prove concretely and all), I am merely getting lucky on certain trades and letting my profits run while cutting my losses short on the trades I am not so lucky on. I do not think that I have any unique talent which would classify me as one who can predict market direction, but I do have a firm grasp on probability and simple mathematics. I am hardly smart enough to determine when we are at the end/beginning of a trend or not, or what the market will do 10 minutes from now let alone next month or next year. I think there are too many factors that play into such calculations, but I know that if I take in more pips than I lose, on average, I will come out ahead.

Also as a side note, I took your advice and have done some looking around on the 'net regarding the non-randomness in the marketplace. Some interesting stuff, but I stand by my assertion that chance plays a large role. I have some books on order from Amazon.com at the moment, so perhaps my beliefs will change with the addition of new evidence - I am a work in progress after all.

Thanks Mike - hope this post finds you well.

-=DAVE=-
  • #55
  • Jul 24, 2007 1:00pm Jul 24, 2007 1:00pm
Already said this and was writing too much, I'm gonna reduce to: if there's an attainable edge, there can't be true randomness. If there isn't, I shouldn't be trading.

As per my understanding of the word randomness(and the dictionary and wiki definitions I read) and after applying the "what's the real point here" breakdown.

I pick my side and belief to be the one where I actually have a shot at consistent wins/net profit and am not doing something contrary to it.

This goes for all of PA, TA, fibs, s/r useage, TL, etc. That's really all one can say in the end.

Running in circles.
Trust price. Know yourself.
  • #56
  • Jul 24, 2007 1:13pm Jul 24, 2007 1:13pm
Tom,

Thanks for the response - here goes..

Quoting moneybags
Although I appreciate your opinion Dave, we'll agree to disagree.
Just because we can't predict price down to the pip, does not make the market random. I guess everybody's definition of random is different.
I appreciate your opinion as well - but I think that after reading your posts we agree a bit more than you think. I believe I am not as clear in my posts as I should be. I need to be more careful in how I explain myself.

I still think that because of uncertainty, the market exhibits random behavior. I just think there is a difference in the predictability of certain events vs. others. Namely, it is quite easy to predict where the sun will be in the sky tomorrow at 12:39pm central time. Why is this so? Well, we know the speed at which the Earth rotates, and we know the speed at which the Earth travels in its orbit around the sun. We also would have to specify where on the surface of the Eath our eyes are going to be observing, but it is possible to calculate the sun's position with startling accuracy. We could also do this problem with incredible accuracy 1,000 years from now - or a million!

The reason the above problem is easy to predict is because we know the variable and how they react. This is different from financial markets. First of all, we don't know with 100% accuracy which particular variables will affect the price of an asset (although we can be pretty certain!). Second, we don't know what the values of those particular variables will be. Third, we don't know how much the values of those particular variables will have an affect on the price. And lastly (most importantly), we don't know what we don't know - there may be things that had no choice but to overlook (like a terrorist attack, or capturing Osama Bin Laden, but we still don't know how those will precisely affect markets). I should add in there the fact that individuals and groups of traders often act very irrationally, and even though we may be able to predict the numbers side, that "people" side of things is very hard to pin down.

Quoting moneybags
What we're trying to say is that the direction price moves towards is not random in the least. Maybe the exact point as in 1.2255 cannot be predicted (sometimes). But why and where price goes (general area) has reasons.
Because if we get caught up in the motion that the market is 100% random, then we might as well go play the roulette instead of wasting our time here.
I never said we've got 100% randomness. I said "There is a good deal of randomness in markets that we try to explain when in fact it is just random noise". That statement has been taken out of context and I just want to remind people what it is that I in fact said.

I stand by that statement, but obvioulsy I do know that there are reasons for price movement. My only caveat is that while the events are unfolding (in real-time) is it difficult to determine the precise reasons and their effects. Ask an economist why we're seeing the data we're seeing now and the conversation gets a little muddy. Ask him why we saw a big bull run in the 90's and things are much more concrete. It is always easier to determine the reasons (causality) for events when we look backward rather than forward. On that last point, I don't know how anyone could disagree.

Now, this doesn't mean that we cannot make lots of money in the market - even with randomness!

Quoting moneybags
But I can guarantee you that there are things in the background that drive price to a specific destination.
Well, here I guess we're in disagreement, and only on the word "specific". There are things that move markets. Yes. They may be in the background. Yes. Price moves to a destination. Yes. A specific destination. Well, I'll say "perhaps". Hehe, thanks for the thoughts - look forward to more.

-=DAVE=-
  • #57
  • Jul 24, 2007 1:14pm Jul 24, 2007 1:14pm
Quoting SeekingLight

Running in circles.

Ok, I'll stop. I was just responding to posts directed at me.

-=DAVE=-
  • #58
  • Jul 24, 2007 1:16pm Jul 24, 2007 1:16pm
Quoting megadave5000

Thanks Mike - hope this post finds you well.

-=DAVE=-
Thanks Dave for getting back to me. I just want to be clear that when I say events are non random, I am not talking about stuff you find in a chart either(this has nothing to do with TA or FA). I am talking about the meat and bones of what goes on in the market(allowing one to have a true edge), prior to showing up in the chart. Maybe to throw your head for a spin, if I told you I trade without charts because these events are not so random.


Have a good one Dave! and if I don't get back to you it's because ill be on vacation till next monday

Best always,
Mike
  • #59
  • Jul 24, 2007 2:01pm Jul 24, 2007 2:01pm
Quoting megadave5000
I absolutely agree! In fact, I'm quite honored that I got you and Mike involved in a discussion - you're two of the most respected members on FF!

All I meant to say was that I knew when I made my randomness assertion that I was opening up the door to a fury of debate - and I'm glad we're talking about it. I quite enjoy a good conversation like we're having here.

Anyway, same as I told Mike above, this week I'm going to be kinda busy, so I might me in and out - I don't want you to think that I'm not reading your responses with interest and thought. I just might not have the time right now to respond properly. Thanks for your posts!

-=DAVE=-
Dave, I'm pretty sure that you have me mistaken with someone else. LOL
You're right about Mike though.

But I appreciate the vote of confidence.
I'm always up for a good chat on these subjects.

PS: I think my use of the word "specific" in my earlier post might have been incorrect. What I meant to say is that there are factors in the market that drive price to a destination that is mapped out (more or less) because of these things. The destination might change from day to day, but if one knew where and what to look at, you'd be able to see why price did what it did. (I know, I'm kinda talking in circles here. )

All the best,
Tom
  • #60
  • Jul 24, 2007 4:02pm Jul 24, 2007 4:02pm
Quoting WTB
In my opinion, fibs only work in clear trending charts with well-defined swings where swings are clearly identifiable. As a general rule of the thumb, if you cannot draw clearly your fibs, then it loses most of its validity and thus no point in drawing them.
And I would add, that when you get this kind of action.....go fishing/shopping/whatever instead.

If it isn't clear to you, then why bother?

There are traders that are good in a sideways range-bound market.....but I am NOT one of them.

I bet WTB has a strategy for those markets though.
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