Indicator Free Trading - Skunny

Using the 61.8 is one of the things I do yes. The market dictates what I do. I use about 4 different ways on the tool. Sometimes they all work.. sometimes some and sometimes... I can't riddle the market out.

These instances are amazingly fun. The short answer on this is..and this always draws ire... we were long to a point where this didn't make sense in context of the past swing. In using the 61.8 style.. I have found.. you can't blindly pull without back work.

Candle fibbing? sure. I am well aware of how unsatisfying that answer is because i asked that before as well. I hope it isn't too irksome.


TK

I'll accept and respect that. But at that point I get frustrated with fibs. If you knew you were long according to a bigger fib, and you are a fib trader, you would have missed one heck of an opportunity in that example because you would not have been willing to go short. This is where fibs become inefficient in my view of the market in terms of opportunity cost.

But like you said, if you are a consistent winner then your patience will pay off over the long run. You will be profitable in your own right. And like you said, gambling is a bad idea. I beleive that one's view and understanding of trading is what dictates when he is gambling or not. Some trader's boxes are bigger than others. The more you understand about what really going on, the less chances you have of gambling, for gambling has everything to do with ignorance.

Trade what you understand and never take a trade outside the limitations of your knowledge.

Good advice Scotty. My apologies for being too hasty and not taking time to see the sincerity of your inquiries. I have enjoyed this dialogue with you and Thom. Happy New Year to all.

Likewise my friend. May the new year be full of blessings to you and yours.

You were right though, sometimes old Scotty gets a little too carried away. Thanks for speaking up.

Absolumo! I did trade that part short but not like that. We can get into the nits and nats next year.

That being said I have immensely enjoyed this dialogue. The breakwater or wind.. chuckle. Was , for me realizing the whole world was in 10 pips or 20... and I stopped my old method of trading sr breakouts for massive pip gains. We can go into simple candle trading which i most prefer these days as it is in and out and , in my view the perfect titration of this.

Let the wanks have their 6000 pips runs. I aim to trade surgically, efficiently and quickly. That is what colours my canvas. My 20 is their 200. Chuckle.

I have an appt with being knackered and imagine kebab, full english and my bed!

TK

Thomknight and Scotty B re your charts in posts 4803 to 4806.

I'm a little confused.

I notice you have pulled your Fibs with the 0% line at the top of a downtrend.

Isn't the purpose of a Fib to measure retracement from the peak of an upwave or the lowest point of a downwave. Therefore shouldn't the 0% line of the Fib be at the peak of the up wave and the lowest point of the downwave ?

Your Fibs appear to be upside down and therefore the retracement levels between 0 and 100% are not where they should be.

Am I missing something, could you explain your reasoning ?

Thanks...

Where they should be is not usually where they are. Sometimes yes, but it's definitely not the norm. So you let price do the talking and then you apply the fib where it says. There's much more going on than just a high and low.

Ok so what if you took the two trades like this with both Fibs plotted correctly and respected by price as they are nearly all the time.

Chart 1/Trade 1 could have been taken by the break of the 0% to any Fib extension you liked. It stopped dead at the 261.2 and reversed.

Chart 2/Trade 2 could have been taken by the break of the 0% to any Fib extension you liked. It stopped at close of trade just above the 261.2 (interesting - Why ?).

Trading Fibs does not have to be complicated. Two easy setups and two easy gains (KISS). You could also have entered either of these trades at retracements before the 0 line depending on your level of experience.

Lets for a moment accept that it is possible to draw a perfect fib. Now, why not program a computer to do this?

Let us not get in to "Its all judgment, intuition and experience and computer can never duplicate all this" ride. Such things were said once about computers and chess till Deep Blue whacked Kasparov. It is now accepted that the world's best chess player is a computer. They have been able to duplicate human judgment, intuition, talent etc.

Drawing a perfect fib should not be such a greatly impossible task for a computer, after all chess has more combinations and permutations possibel from move 1.


Any genius coders around?

I totally rely on small ceremonial sacrifice on the living room floor. Do this every Sunday 10 minutes before market opens

[quote=trader365;3333215]

In the chart the blue fib and red fib are in opposition.
Is the blue fib where I have placed it, what stopped the red fib from hitting it's 138.2 ext ?

Thanks
SK

Hi mate. In your previous post why have you pulled the blue fib from the bottom, up and the red fib from the top, down. Now please excuse me for my ignorance but I have had trouble deciphering Thom so if he has already alluded to this then my most humblest apologies.

I feel stuffed like that Turkey I just ate, phew.

MD.

[quote=shiva;3334563]I totally rely on small ceremonial sacrifice on the living room floor. Do this every Sunday 10 minutes before market opens

I think 10 mins before the mkt opens is cutting it a bit close but if it's working.....nice job

Hi MD,

That's what I was referring to in previous posts. Fibs have been pulled in reverse in a number of charts.

In these cases it's no wonder they are failing as a Fib has to be pulled in the direction of the wave it is across.

This is really going to confuse many.

In regards to post 4829. It seems like u can pull a fib from either of the 2 areas that I have circled. A bit of form fitting perhaps...maybe a bit subjective

Trader365. There are a few variations on a theme here. We all fit fibs differently and yes, you could say they are subjective. I'm in the camp of fibbing a fixed candle like a daily then moving down to an hour to look at how the lines pan out. I have found this does mean that sometimes the fib does not fall exactly on a swing end to end and I have tinkered with moving it to the nearest swing, seems to work, for me!! Other guys here do similar, some of us take trades within the fib range..

Others like Thom pull fibs to price and and place them so as they fit to certain levels (forgive me if I have you slightly wrong Thom). They work for him but again you could call them subjective or curve fitting.

Anyway you don't sound like a newbie to me so apologies if I'm teaching my grandmother to suck eggs.

MD.

You are right Trader365.

Too many are expecting Fibs to meet the target to the Pip.

The point of that post was to highlight the correct direction to pull the Fib in.

Using your points for Fib placement will give a similar result and in any case will definately result in profitable trades.

The overshoot at the top is to be expected after such a large candle thrust in that direction. Like trying to stop a fast bus.

Hey Compass. Just to clarify something on the fib pulling thing. I always pull them so that the zero is at the bottom of my fib and the 100 at the top regardless of price direction. Now, it all depends on how you set your fib up because each level is equidistant from either end, you can totally do away with the percentage numbers and type what you like, mine all say "I'll have a Baileys".

Hey we have Assasins Creed 2 but we haven't played it yet, is it any good?

MD.

[quote=Misterdaz;3334277][quote=trader365;3333215]

Trader365, first of all Happy New Year. I just wanted to say I haven't ignored your posts and agree with you, value is the core of all price action. Supply and demand the basis of all trading. I see major S/R on the charts, I always watch the left hand side of a chart. I think most of the guys here share my thoughts but they like me find the fibs fascinating and in most cases successful. Why? They are not magic, naturally occuring ratios throughout our existence, our world? Sounds like cobblers to me but I'm still intrigued!

Quite often the fibs line up with key s/r areas, I know, I make sure of it before I pull the trigger. I probably don't need them but they kind of add order to my screen, a kind of blue blankie even.

Hope it is a healthy and prosperous one for all!!
I agree with u about the naturally occurring ratios all around us. I guess we can debate on whether or not the markets are "naturally occurring" or not. That aside, read the paragraph u wrote....if the fibs need to line up with s/r levels, why confuse the matter with fibs? Why not look at PA at s/r levels? Spending some time watching the mkt action at s/r levels can be quite a bit more valuable than a line drawn on the chart (your blue blankie).

I'm not trying to convert anyone away from fibs, although it might seem that way. Merely pointing out, from 15+yrs experience, what really makes the mkts move & putting out some food for thought...chicken or the egg.
Do u think big floor traders are looking at fib ratios for their posiotns or good spots to trap the small traders that have orders there? Maybe yes, maybe no....but certainly not any of the floor traders or trading desk traders that I have known over the years.

A comment was made here recently that it doesn't really matter why the fibs work but as long as they do, even if it for a different reason than one might think, then it doesn't really matter. I agree with that 100%. That thought process has made me $$ along my journey to become a really good trader, which always seems to be a work in progress. But the question that still remains, for me anyway is....Why. Why do the mkts react at the price levels that they do. I need something more logical...... Understanding the Auction Principle is invaluable.

For newer traders, I think it is very important to understand the Auction process of the mkt. It is the foundation of the mkt. Using it in conjunction with fibs or any other indicator, although not necessary, with make u a much better trader.

Trading is my sole source of income and has been for over 10 years. I say this ONLY because I have hit many potholes in the road along the way....I even drove off the cliff a few times. If anything I say might help avoid some of the deep the potholes, then I would be happy. The bottom line is that trading is 90% about us and only 10% about trading. Any method, fibs, MACD, RSI, MA cross over etc. can make $$ The problem is, some systems might stop us out 50%, 70% of the time and still make very good money. Traders hate to lose by nature but just because 7 of 10 trades might stop us out doesn't mean we can't make money. How many of us can honestly say that we can truly take 7 stops out of 10 and still continue with their system...especially a trader that is fairly new to the mkts. I've been trading for a long time and I can't trade with a ratio like that but I also don't expect to trade at 90% either...I'd be setting myself up for failure. It breaks us down mentally, I know , I've been there.

I've rambled long enough but I think you know where I'm going with this. Why are only 5-10% of the traders earning a living at this?? I think those are real numbers, or close enough. It's about odds and probabilities...trade by trade, day by day, week by week, month by month, 1/4 by 1/4, yr over yr.

I hope everyone has a trading plan for the new year and sticks to it. Even if the plan sux and loses $$ on a consistent basis, if you follow it then you are light years ahead of the pack. The trading plan can always be fixed but if you can't follow it, what good is the best plan in the world? So for the newer traders who are trading small size or demo/paper trading, follow what ever plan/rules you have made...NO MATTER WHAT!!! It's invaluable as most traders deviate form there plan at one point or another, during the course of their career.

Good Trading