Where would 'your' low be for the Fibo?

If you're a Fibo retracement user, what low would you use for the low point? There's a low in Feb 2006 but there is also a lower low in Nov 2005. The high is the white x on 1/23/2007.

Daily chart for the GBPUSD...

For shorter time frame i'm long.

http://upload5.postimage.org/402603/photo_hosting.html

If I was drawing a fib retracement on this chart the low point would be 1.9250 My high point would be that last peak, looks like about 1.9920

It looks like it's around a 50% retracement right now and it could be heading higher. I don't think it would be a bad trade to go long right here. I don't trade the GBPUSD though so take it with a grain of salt.

I would use the November 2005 low.
I get 1.9240 as 23.6% retracement of that range:
28.11.2005 - 1.7050
23.1.2007 - 1.9913

I would also look at a shorter time range:
11.10.2006 - 1.8515
23.1.2007 - 1.9913
50% is 1.9214 on my charts.

thanks guys...

dof...is that the akuma indicator on the bottom???

No

Palmer,

The lows of Feb, 06 and Nov, 05 have absolutely no bearing whatsoever at this point. Why? Because the price is no where near any fib from those lows.

Now, draw a fib from the low of 1.9258. Price has hit the 50 ret and is now up to the 38. Notice the 62 ret at 1.9507.

Next, draw a fib from the low of 1.8834. Notice the 38 fib at 1.9500.

You have a 38 and 62 ret 7 pips away from each other. This is a confluence of fibs. A simple trend line of the last three significant pivots puts the line cutting through the confluence area on Feb 3.

If price heads down to this area, then this is where it will meet resistance. It also works as a magnet for any down move from here, so if we get a turn around in the next day or two, you could play it down to 1.9500.

The point is you're wasting your time looking at Fibs that are so far away. Focus on the fibs at hand and you'll save time and energy. Whenever you find a confluence of a 38 and 62, you've found a spot where a turnaround is more likely to occur than just at a single fib. Btw, the work of Joe DiNapoli is based on trading off of confluences.

Hmmm...Not too sure about that Dopey.

If I were to draw that many lines across a chart I'm pretty sure that price would hit it a few times....

I think the preferable date to use is April 3 '06 since the move away from this point is impulsive. But the further back you look the longer the timeframe you would trading.