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how to plot fibonacci?

  • #1
  • First Post: Aug 28, 2007 7:49pm Aug 28, 2007 7:49pm
Ok another embarassing question. When plotting fibonacci levels i am confused.

My understanding when looking at fib retracement levels is you always start at the swing low and then the swing high. For me this means that fib level 100 is always on the bottom of my chart and 0 is at the top of my chart. However some charts i noticed have 0 at the bottom and 100 at the top. This should not matter right?

Where do fib extension levels come in? Are fib's called retracement levels when in an uptrend and extensions when in a down trend?
  • #2
  • Aug 29, 2007 1:41am Aug 29, 2007 1:41am
Quoting saskgui
Ok another embarassing question. When plotting fibonacci levels i am confused.

My understanding when looking at fib retracement levels is you always start at the swing low and then the swing high. For me this means that fib level 100 is always on the bottom of my chart and 0 is at the top of my chart. However some charts i noticed have 0 at the bottom and 100 at the top. This should not matter right?

Where do fib extension levels come in? Are fib's called retracement levels when in an uptrend and extensions when in a down trend?
You are correct about plotting the swing high/lows. Just remember the short cut: When drawing a swing low to high in the case of an uptrend start at the bottom and move up just like the trend movement. Reverse this for a short move.

The higher % fibs are how much the move can retrace with 100% being the greatest. Hope that helps.....
  • #3
  • Aug 29, 2007 8:09am Aug 29, 2007 8:09am
I was also taught that the smaller the percentage retrace, the stronger the potential resistance/support, ie the 23.6 is most likely to hold, followed by 38.2, 50 and finally 61.8. Would anyone agree or disagree that that is the case? Would be very interested to know...
PhD with a specialty in economics & finance.
  • #4
  • Aug 29, 2007 12:34pm Aug 29, 2007 12:34pm
Think real hard about this. If you have a high and low, it doesn't matter at all if the 100 is on the top or the bottom.
  • #5
  • Aug 29, 2007 12:50pm Aug 29, 2007 12:50pm
Quoting saskgui
Where do fib extension levels come in? Are fib's called retracement levels when in an uptrend and extensions when in a down trend?
The retracements are showing the levels between two known prices, ie, price goes from 3600 to 3700. The 50% retracement is 3650.

An extension is projecting into the future into unchartered territory. It requires three known prices and it then shows numerous projection levels.
  • #6
  • Aug 29, 2007 1:31pm Aug 29, 2007 1:31pm
Quoting Dopey
Think real hard about this. If you have a high and low, it doesn't matter at all if the 100 is on the top or the bottom.
I think when it's 50% it's a fair statement, but i wouldn't think so if you're talking about others

Just my 2 cents, i may be wrong (i'm a newbie as well)

If in an uptrend and market corrects and goes to low , a retracement to 2800 from say a high of 3000 and low of 2500 would be at the 61.8% area (approx) but it would be weird if you said the retracement was 23.6%.

Quoting 4x trader
You are correct about plotting the swing high/lows. Just remember the short cut: When drawing a swing low to high in the case of an uptrend start at the bottom and move up just like the trend movement. Reverse this for a short move.
This sounds more like it when i plot it onto a chart.

Cheers
Mike
  • #7
  • Aug 29, 2007 1:36pm Aug 29, 2007 1:36pm
Quoting mikewong
I think when it's 50% it's a fair statement, but i wouldn't think so if you're talking about others

Just my 2 cents, i may be wrong (i'm a newbie as well)

If in an uptrend and market corrects and goes to low , a retracement to 2800 from say a high of 3000 and low of 2500 would be at the 61.8% area (approx) but it would be weird if you said the retracement was 23.6%.

Cheers
Mike
Mike, what Dopey is saying is proportionally the 38.2and the 61.8 are in the same place at opposite ends. and the 23.6 and 78.4 are the same way.

So, it is fairly easy to keep it clear in one's mind whether it is a 61.8 or a 38.2 and from which direction. It never could be a 23.6 and 61.8

However, it is possible to be a confluence of 38.2 and 61.8 of a smaller degree pivot from the focus point
  • #8
  • Aug 29, 2007 1:39pm Aug 29, 2007 1:39pm
Yep, what he said.
  • #9
  • Aug 29, 2007 1:45pm Aug 29, 2007 1:45pm
Quoting smjones
Mike, what Dopey is saying is proportionally the 38.2and the 61.8 are in the same place at opposite ends. and the 23.6 and 78.4 are the same way.

So, it is fairly easy to keep it clear in one's mind whether it is a 61.8 or a 38.2 and from which direction. It never could be a 23.6 and 61.8

However, it is possible to be a confluence of 38.2 and 61.8 of a smaller degree pivot from the focus point
thanks for the insight.

by the way what does 1kt mean ? next to yours and dopey's name
  • #10
  • Aug 29, 2007 1:47pm Aug 29, 2007 1:47pm
No problem... A good book on the topic is Joe DiNapoli's book It is a bit expensive though, I think it is about $160.

the 1KT is here http://www.forexfactory.com/showthread.php?t=44562
  • #11
  • Aug 29, 2007 1:53pm Aug 29, 2007 1:53pm
thanks scott!
  • #12
  • Sep 4, 2007 11:31am Sep 4, 2007 11:31am
If you really wanna wet your noodle, try taking square roots of fibs and plotting those ratios. All of a sudden a whole new series of numbers emerges. Some of which are even more powerful than the first.

Or doubling up the fib numbers. 1,3,5,8,13,21,34,55 now become 2,6,10,16,26,42,68,110.

As far as plotting the high/low, I've come to the conclusion that while you can arbitrarily apply fib ratios to any range and have harmonic proportion there is a grander scheme at work and grander cycles that aren't arbitrary. To quote Gann, "In order to forecast future cycles, the most important thing is to begin right, for if we have the right beginning, we will get the right ending. If we know the cause of the effect there can be no doubt about predicting future event or effect".
  • #13
  • Sep 4, 2007 9:35pm Sep 4, 2007 9:35pm
OK, You got My noodle Wet. But I want More.

How much work have you done with Fibs AND...
How would you alter the Sequence to best live in this FX World?
  • #14
  • Sep 4, 2007 10:00pm Sep 4, 2007 10:00pm
Quoting Bemac
OK, You got My noodle Wet. But I want More.

How much work have you done with Fibs AND...
How would you alter the Sequence to best live in this FX World?
It's not so much altering it as it is revealing what is already there. How's that for direct and to the point?

I'll write up some more tomorrow. I've got a paper I'm way behind on writing. Man, I wish I would have just finished school when I was in my 20's. Doing the class thing on the a$$ end of my 30's sucks worse than it did then!
  • #15
  • Sep 4, 2007 10:32pm Sep 4, 2007 10:32pm
Quoting JR97
It's not so much altering it as it is revealing what is already there. How's that for direct and to the point?

I'll write up some more tomorrow. I've got a paper I'm way behind on writing. Man, I wish I would have just finished school when I was in my 20's. Doing the class thing on the a$$ end of my 30's sucks worse than it did then!
Hey JR the only subject I can conceive of you having problems in would be Foriegn Language because you have alraeady submittied Math and Sociail for which I award an 'A'.
  • #16
  • Sep 5, 2007 2:37am Sep 5, 2007 2:37am
It's almost impossible for me to go into without writing a book. So I'll let a picture tell a few thousand words.

http://www.bryce-gilmore.com/dtpa001.JPG
http://www.bryce-gilmore.com/bgbook.htm

I haven't read much of his stuff but the pic on his website tells a lot.

That explains square rooting prime fib numbers as well as the golden ratio.
But also take the time to square root some of the fib ratios themselves. .382,.618, etc. see what you get and plot them. Maybe squar root them twice or three times.

I'll try and be less cryptic about the doubled up fib numbers. When doing bar counts on swings and pivots, the fib numbers will come up a lot. Every now and then there will be a few points that don't work out to fib numbers all the way around. More likely than not those that don't work out will be the fibs doubled up. But don't limit it there. Instead of square rooting try squaring fib numbers. ie 4,9,25,64, etc. Also, if squaring, just take the normal sequence and those work out a lot too. 4,9,16,25,36,49, etc And don't forget the grand daddy 144.

You draw enough lines and count enough bars, something is going to hit and it all seems like rubbish. But if you start right you can end right. And if you end right, you know where to start again and so it goes. It can be a lot of work but when you work it out there will be times when space and time unfold and you pick a price and a time way in advance sometimes months or yeas in advance and it nails bang on. Call it luck once, but what about the third time? the tenth time? Then you're hooked.

I might talk a good game, but I'm still relatively new to this stuff. I've been at it for about 3 years now and I can't get away from it even when I've avoided charts for 6 months!
  • #17
  • Sep 12, 2008 4:31pm Sep 12, 2008 4:31pm
Quoting saskgui
Ok another embarassing question. When plotting fibonacci levels i am confused.

My understanding when looking at fib retracement levels is you always start at the swing low and then the swing high. For me this means that fib level 100 is always on the bottom of my chart and 0 is at the top of my chart. However some charts i noticed have 0 at the bottom and 100 at the top. This should not matter right?

Where do fib extension levels come in? Are fib's called retracement levels when in an uptrend and extensions when in a down trend?
Lets Make it Easier to understand this is how you need to plot a Fibo I hope it helps . . .
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Click to Enlarge Name: fibo.jpg Size: 80 KB
  • #18
  • Last Post: Dec 6, 2013 5:30am Dec 6, 2013 5:30am
Saskgui, there is no point of being embarrassed as far as drawing Fibonacci retracement is concerned since it seems bit complicated at the beginning.

Here is what you need to do. Find out the trend first. If it is an uptrend, start drawing your Fibonacci retracement from the point of higher high. The level will be marked as 100. Come all way down to the point of lower low; apparently that point will be marked as 0.

On a down trend, you need to do the opposite. Here is an example of drawing Fibonacci retracement on down trend.

Once you have drawn Fibonacci retracement, you get levels such as 0, 23.6, 38.2, 61.8, 76.4, 100, 138.2, and 161.8. These levels are extremely important to set stop loss and take profit.

You can get those levels from here as well: http://www.forexrazor.com/en-us/tool...alculator.aspx This tool calculates those levels which you might find handy. Hope this helps.
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