How well do fibos work?

Let's see

eur/usd 1.4179 = 61.8% of 1.4087-1.4387

Fibos work very well if setup properly.

For ten years, I have tried to see the merit in fibs but simply can't. Everyone has their own style. Pivots are actually pretty useful. However, with fibs, they seem to fail constantly because the market is rarely trending in a manner consistent with using fibs. But I'm sure I can be proven wrong by someone. I'd like to see a chart where fibs make sense consistently because I can throw out dozens of charts where they are useless.

I am a beginner but I will share my opinion fwiw: I don't feel complelled by how I see fibs being used. For one thing, if you look across a sample of 100 traders, all using the same H1 chart or whatever, and ask them to draw fib extensions for pa in a given time period on the chart, how many variations will you see? Typically, I expect several, if not many. So, too ambiguous...

I assume these lines that one may draw on a price chart derive their significance from the extent to which they are used and seen across the entire population of traders. But the size of the trader is relevant, too, because the large traders (banks, hedge funds, etc) move the market. So do the largest traders use fibs? I honestly don't know but I would doubt it....

More likely the use of daily, weekly, & monthly pivots is more widespread. Although there are different ways to do the PP calcs, they are derived from calculations, after all, and there's less ambiguity there.

'Fibs' work fantastically in the past, using them to predict the future is somewhat more hazardous. You can add pitchforks to this pile, pick any chart and you can draw amazing retrospective pitchforks, keep in mind it's also pretty easy to draw pitchforks & fibs onto pictures of clouds, or peaks on a rough sea, pretty much any chaotic phenomenon. This however this will not let you predict the whether, or the direction of the tide.

This reminds me of an argument amongst hunters over iron sights, vs scopes, the point being iron sights aren't any good.

I of course disagree and had the meat to prove it. My iron sights always gave me the big picture, were not affected by temp or humidity, weather, vibration, knocks or getting banged a'rd. I knew where they were set and adjusted accordingly or passed on the shot. I've never owned a scope and never felt the lack.

That was true of everything from my .22 up to my .300 magnum, and both the 54 and 72 caliber black powder percussion cap pieces with dovetailed buckhorn sights that you adjusted with a small mallet or knife hilt.

It was never important to me what the scoped guys thought or whether they were right or wrong. I got my meat my way, and they usually got their meat their way. My kids grew up scopeless as well. I do know I was never able to get any of the naysayers to go stand a couple hundred yards out and let's see if my old iron sights worked or no...

A few years ago, I did eventually shoot all the tail feathers off a spruce hen once with a 22 at a'rd 50 yards as my old eyeballs apparently couldn't tell the difference between the two ends anymore...

Needless to say my twins were hysterical the whole time... I just could not believe that darn bird could sit there with me blowin' his head off over and over again while the feathers floated down

Only those of you familar with northern spruce hens will probably be able to appreciate that picture.

But I digress and the above story is not a reflection on iron sights or fibs but rather old eyes. I guess the question was "How well do fibs work?" I'd have to say that probably depends on the operator. I could show you dozens of charts as well where they don't work, but I only need the One that does to do ma thang...

...and they seem to work just fine for me and some others I know...

Like Arcimedes said... "give me a fib and a pivot and I will trade the world..."

What is interesting is that people that know how to shoot, shoot with iron sights. People that can shoot well iron sights can also shoot well with a scope. But people that only shoot with a scope have a hard time with iron sights.

Okay, now the thread topic:

Fibs work very well, but like anything in the trading world, it depends how your brain is wired. Fibs makes sense to some and not to others. It all basically comes down on how you see the market and what makes sense for you individually. Ultimately everything is a filter to see the market in a way that makes sense to the individual.

Maybe a better question is, how well do fibs work for you? If they work use them, if not, toss them.

Sounds cruel, I know, but remember taking multiples of them from the same tree. With Throwing Knives.

The most important thing was picking the Correct Target First & Next.

No apologies & don't ask unless you have been a Vegan ALL Your Life...
If so... you need an education....

{Ahhh S#it... here it comes...}

Fibs work 100% of the time in hindsight.

You can always find a place to draw fib lines, on yesterday's chart, that will show any result you want.

You can do the same thing with support and resistance lines.
Draw a random line through the middle of price action, and I guarantee you'll find places price has bounced off of it.

It takes the mula off the table for me. Applied to High and low GMT. Doesn't allways work out that way but it wouldn't matter as long you have a plan B.

I trade strictly with fibs and they work perfectly every day. Anyone who says they don't work, or are inconsistent, or only can be used to see what happened in the past simply has no idea how to apply fibs to a chart. By the way, it took me six months to figure it out. They predict the future every day. I know from the equity in my trading account and the cash in my bank account. Fibs, if applied proplerly will tell you where to enter the market and where your support and resistance prices are every day.

Hey, I want a big fat bank account, so please, tell us how to do it the right way!

Thanks!

I only trade cable. I only use the day chart and the 1 hour chart. The day chart gives me exit prices or support/resistance prices based on fibs. The hour chart gives me entry prices based on fibs. Right now, cable is testing a trend line on the day chart created by the uptrend from 1.3653 to 1.4396. The last daily low of 1.6388 on the current retracement was the 61% retracement of the uptrend from 1.5893 to 1.7042. The next support price, if the trend line is broken, is 1.6210, 78% retracement from 1.7042. If the uptrend line holds the next resistance price is 1.6792, 61% of the downtrend from 1.7042 to 1.6388. Now, there's always a caveat. After intense study, I have recognized what I call the 3 - 4 retracement. That is a price midway between 61 and 78% (3rd and 4th retracement levels). That means there is a potential support level at 1.6295 which is where I will place my exit price if the uptrend line is broken. That line will be broken Monday or Tuesday at the latest. Now when it comes to entering the market I can't give you prices because the market isn't open. But when it does open follow these rules on the one hour chart for determing an entry price. If the market is trending down start your fib line at the last high price before the last low price. As the market moves from that high to that low it will develop a retracement pattern. Meaning it will retrace 61% or 38% or 78% or whatever each time the price drops. Base your entry price on the retrace pattern. If the price drops with no pattern or an inconsistent pattern, base your entry on the range of the drop. Meaning if the range of the drop is < 100 points enter at the 78% retracement price, if > 100 enter at the 61% retracement price, if > 150 enter at the 38% retracement price, if > 200 points enter 20 pips below the 38% retracement price. Apply the same method to an uptrend. I will gladly post my entry and exit prices for the first trade I make next week and provide the fib prices used to make the trade. This method of trading usually results in 2 to 4 trades a week. Of course the pips earned varies based on price movement.

Excellent, thank you my friend, and, btw, welcome to the FF.

I am going to try this on cable (which I have never watched) with a micro-lot come Sunday & let us compare notes here. Hasta la vista.

Typo? you mean 1.5982?

or maybe fibs are estimates. thats how i use them.

Everything works whether it be fibs, trendlines, arbitrarily drawn "fibs", elliot waves, cycles, pivots, patterns, etc. etc. etc.

Only becuse they all give you a reference point to measure PA movement from your self-chosen center of universe.

How one uses that measurement, is what that either works or fails - All measuring tapes will give you exact measurement but in your choice of unit.

Yes, that was a typo. And my broker has that price as 1.5983, just to further explain my typo.

"Everything works whether it be fibs, trendlines, arbitrarily drawn "fibs", elliot waves, cycles, pivots, patterns, etc. etc. etc."

Is the Fibs tool the best among them?

what ever u focus on will work..it is that simple..its actually just support and resistance..and every tool u use will have confluence in these area..

so to keep it simple ..its support and resistance hope that makes sense and isnt a riddle