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Are Fibonacci levels overrated?

  • #21
  • Mar 30, 2007 6:51pm Mar 30, 2007 6:51pm
Quoting Taters
...There are so many relationships on so many time frames that my chart gets too crammed full of lines when I use them. And that is before expansions which are a bit different animal...So which to choose?
You're getting close but possibly finding yourself in the same situation as the one soldier who is out of step and calling "Hey Sarge, it aint me! I'm workin' just as hard as everyone else. All those other guys that are Out Of Step."

Your task now {if you wish to include Fibs in your arsenal} is to discover which Timeframes are important to the Market Makers on which pairs.

A word of caution. {tip}
As a Market moves from Bull to Neutral to Bear & Back, the Fib of Interest will change.

Do you think you could make a Buck or two on that info? I have.

ps. check out the chart posted by zawo... and observe the outcome.
btw zawo... I notice PFG @ on the image you posted. Is that Per. Fin. Grp.?
  • #22
  • Mar 30, 2007 7:30pm Mar 30, 2007 7:30pm
Although Fibs do have a bit of self-fulling aspect to them, take a look a chart from fifties years or more ago before they were first used.

You see similar price movement relationships.
  • #23
  • Mar 30, 2007 7:45pm Mar 30, 2007 7:45pm
For every chart where you show me Fibonacci worked, I will show you one where it doesn't work. All you have to do is go to the "Cable Update" thread, and you'll see people getting burned repeatedly.
  • #24
  • Mar 30, 2007 8:08pm Mar 30, 2007 8:08pm
Quoting kenmania
I read a quote on another forum today that if price retraces to 61.8%, then it's generally believed it will go to full 100% retracement.

About an hour later at 1500 GMT I was trading the eurodollar and that's exactly what I observed happening.
I believe that this is a general rule for Fibo levels, that if prices break the 61.8% level, they will most probably retrace the rest of the move, which is 100% of the move, however, there is 1 exception to this rule...This exception is major wave 1 in Elliott wave analysis...Major wave 1 means the first up/down wave after a major long downtrend/uptrend...

It is believed that this major wave 1 is followed by a sharp correction, which is by default wave 2...This wave 2 almost always retraces anywhere between 75% to 85% of wave 1, rarely 90% and very rarley more than that...This is because after a huge trend that lasts years, the first wave that tries to reverse it is usually seen as a normal correction & a great entry point in the direction of the prior trend, so almost all market participants go against it making the correction sharp that it breaches the 61.8% level very easily...


Thanks,

Nader
  • #25
  • Mar 30, 2007 8:12pm Mar 30, 2007 8:12pm
Quoting Taters
...is not that fibs don't work, but that they work TOO well. There are so many relationships on so many time frames that my chart gets too crammed full of lines when I use them. And that is before expansions which are a bit different animal...So which to choose? it soon creates a mess. Which is support? which is resistance? TP at 38%? 62%? 50%? (50 not technically a fib% by the way...) Buy/Sell at 1.382/.786/2.618? I would appreciate hearing the opinion of anyone using Fib studies successfully!
To better estimate the most probable fibo ratio where prices will stop at and reverse I think further analysis of the prior move should be done...For example a strong trend with increased momentum as measured by any momentum indicator like RSI or whatever is expected to retrace the minimum ratio, i.e. between 23.6% and 38.2%...If the prior move was not strong enough, then between 38.2% and 50% would be more appropriate and so on...

In brief, I believe that the shape, strength & the duration of the move under analysis will dictate which fibo level to wait for, else, it will have no meaning & will lead to confusion...


Thanks,

Nader
  • #26
  • Mar 30, 2007 8:30pm Mar 30, 2007 8:30pm
Quoting tdion
For every chart where you show me Fibonacci worked, I will show you one where it doesn't work. All you have to do is go to the "Cable Update" thread, and you'll see people getting burned repeatedly.
{Oh I don't want another conflict ! ! ! But here goes}

The following comment is not in support of Fibs per se but more a comment on an evolving work environment.

When I am Trading, which I have done since Lo..ong before there were Demo Accts, a part of my decision proccess was/is, "What are the Locals thinking?"
Why? Because those are/were the guys who are/were standing in the Front Line with their nickers at their feet and had their finger directly on the pulse {so to speak} trying to figure out if they are/were dealing with the Bruin or the Horns.

Along comes this "E" age of Button Click Traders and... {wow. I just realized that it was ~ 10 years ago when I asked my partners at the time "How are we going to deal with this Huge influx of Know Little E-Traders who will, by exuberance, Overshoot expected Stop & Reverse points on the Price Charts.}... now the Noise can sometimes be deafening but, that's ok because, it's more money in the market.

Fifteen years ago, Systems were far more simple because there was Less Noise. {Fewer False Signals} because the Players understood the Game. Nowadays it is far more difficult due to Gung ho, Gotta be In, Don't wanna miss this one, Lesser experienced players overshooting the mark and carrying Price beyond realistic levels.

Please. If any of the above makes sense to you, what do you think those Old Fogies are doing now other than taking the "E" money from those that wish to throw it at them?

There is at least one mentor here who has reaped the rewards of this method and is currently teaching it to his selected student.

Widen your thought proccess. Please.
  • #27
  • Mar 31, 2007 5:58am Mar 31, 2007 5:58am
I've been using Fibs for many years now. I find they work just fine, if you know how to use them. I haven't seen much correct info on this thread. I strongly suggest Joe DiNapoli's work with Fibs if one wants to get a better handle on them.

Also, Robert Miner's work is about the best you'll find for expansions (you've got to take the Elliot Wave with a lump of salt though).
  • #28
  • Mar 31, 2007 6:38am Mar 31, 2007 6:38am
Quoting chrisbedo
I use the following
38.2 retreace should go to 161.6
50.0 retrace should go to 138.2
61.8 retrace should go to 121.4
78.6 will either reverse or continue the trend....low risk place to enter trade
take bounce with small stop or take break with small stop 3-4 pips on the otherside!
I see this work day in and day out and this is all based off of previous days trading range. example...draw your fib lines on mondays high to low or vice versa, low to high for tuesdays fib levels and wait for your retracements.
works best at london open.
Could you show some charts, chris. It looks interesting.

Thanks,

Jim
Indicators show the past. Price Action "Indicates" the future.
  • #29
  • Apr 1, 2007 11:52am Apr 1, 2007 11:52am
here is a chart before sundays open.....lets see what happens! this study would be based off of fridays swing, low to high. gbp had a 21.4 retracement which really has no target, you would like it to retrace a little more but conservative would be 138.2. eur has a 38.2 retracenent which should give a target of 161.8. lets see what happens later. Remember the Asian session hasnt had a chance to react to fridays movement yet!
  • #30
  • Apr 1, 2007 11:57am Apr 1, 2007 11:57am
test
  • #31
  • Apr 1, 2007 12:32pm Apr 1, 2007 12:32pm
http://www.forexfactory.com/attachme...1&d=1175448693
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  • #32
  • Apr 1, 2007 12:35pm Apr 1, 2007 12:35pm
http://www.forexfactory.com/attachme...1&d=1175448868
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  • #33
  • Apr 1, 2007 12:36pm Apr 1, 2007 12:36pm
I dont want to go and cherry pick charts so lets see if we can post ahead of time.
  • #34
  • Apr 1, 2007 12:40pm Apr 1, 2007 12:40pm
http://www.forexfactory.com/attachme...1&d=1175449187
Attached Image
  • #35
  • Apr 1, 2007 12:46pm Apr 1, 2007 12:46pm
http://www.forexfactory.com/attachme...1&d=1175449567
Attached Image
  • #36
  • Apr 3, 2007 4:53am Apr 3, 2007 4:53am
Fibs are overrated, that's for sure. When I look at this daily chart of the GBP/USD though ...
Attached Image
  • #37
  • Apr 3, 2007 9:16am Apr 3, 2007 9:16am
Quoting AmatPro
Fibs are overrated, that's for sure. When I look at this daily chart of the GBP/USD though ...
Its a blur to me. Can't make out the numbers?
  • #38
  • Apr 3, 2007 10:27am Apr 3, 2007 10:27am
Quoting SunTrader
Its a blur to me. Can't make out the numbers?
Does this help ? (0/100% level set at 2,0000)

http://i160.photobucket.com/albums/t...dfibonacci.png
  • #39
  • Apr 3, 2007 10:34am Apr 3, 2007 10:34am
doesnt work well by itself.. nothing works well all alone, you have to filter it somehow and be patient. wait for the best trades
  • #40
  • Apr 3, 2007 10:43am Apr 3, 2007 10:43am
for me self i love to use Fibos. and play around with them. well i dont have years of experience so can not say for sure . but so far seems when playing in diffent Time frames and combinating 2 timeframes fibos might give a small smell what might be happening! but i quess fibos might flour up some trading systems? for me Fibos are the "main" point!

aka. as a main point i mean good for sniffing enter and exit points
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