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Why 61.8%?

  • #141
  • May 2, 2010 9:29am May 2, 2010 9:29am
Quoting asgard2
the reality is, they do not work as well. .
My observations say different. But don't listen to me, the econometrics and stats people say the same.
They're the ones working for the banks afterall.
  • #142
  • May 2, 2010 9:30am May 2, 2010 9:30am
Quoting Sim
oh shit this thread what an eye opener!!! now STATS don't back up that psych levels work to the pip i can conclusively say the following:

MARKET DOES NOT I REPEAT DOES NOT HAVE ANY RESPECT FOR .00 OR .50 PRICE LEVELS!

THEY ARE MERELY AS RANDOM AS ANY OTHER NUMBER BECAUSE I SAID SO!!!!!

NOW I WILL ENDULGE IN PERSONAL ATTACKS TO BACK UP MY OPINION rofl
Thats either a deliberate misrepresentation of the facts presented, or you don't understand them.
No one who trades around psych levels feels the need to cite, "order of nature" style bullshit to back them up.
  • #143
  • May 2, 2010 9:58am May 2, 2010 9:58am
Quoting fxpipper
I've recently really taken an interest in the Fibonacci retracement tool...but something's been bugging me, and that is the 61.8% ratio. What is it about this number that makes it the most significant of all the ratios? I've heard it be called the "golden ratio", but don't understand why.

Is there a reason? Or is it just something that has been firmly ingrained into the minds of traders, that the reasons don't matter anymore.

I've been trading the EUR/USD since the start of the down trend in December and watched it pretty much blow through...
I think your thread has been hijacked. Perhaps you should start a new thread on how traders use fibs, especially the .618. Traders can then post some charts on how to use fibs and what to look for in trading. Practical use vs. the current level of contribution you are receiving now on this thread. I am amazed that the arguing continues here; silly and sad. Good trading to you all.
  • #144
  • May 2, 2010 10:16am May 2, 2010 10:16am
Quoting GEfx
I think your thread has been hijacked. Perhaps you should start a new thread on how traders use fibs, especially the .618. Traders can then post some charts on how to use fibs and what to look for in trading. Practical use vs. the current level of contribution you are receiving now on this thread. I am amazed that the arguing continues here; silly and sad. Good trading to you all.
Maybe you could put forward some logical arguments instead of leaning back and making smug proclamations like "silly and sad".
  • #145
  • May 2, 2010 10:40am May 2, 2010 10:40am
Quoting Ted1983
That was my take too, and hundreds of other forum posters takes aswell. Unfortunately it only makes sense on a superficial level.

hi Ted,

Could you explain a bit more what you mean: Unfortunately it only makes sense on a superficial level.
__Thanks__ MJ
  • #146
  • Edited 11:07am May 2, 2010 10:41am | Edited 11:07am
Here is a simple way to use a retracement tool (with no fib ratios in sight);

Current range is below previous range, therefore trend is down.
No magical order of nature hocus pocus.
Attached Image (click to enlarge)
Click to Enlarge Name: euro retracement tool.jpg Size: 53 KB
  • #147
  • Edited 11:02am May 2, 2010 10:50am | Edited 11:02am
Quoting M_j
hi Ted,

Could you explain a bit more what you mean: Unfortunately it only makes sense on a superficial level.
Yeah. I think it's unreasonable to claim the self fullfiling prophecy hypothesis, because I don't think the majority of volume in the market gives a flying fuck about fib levels.

Retail system shills like acumen come in here throwing their weight around,
saying how banks use fib levels (probably some do).
Unfortunately he has a vested interest in selling such ideas as gospel (for a bargain $99).

If you were a commercial hedger, who needed millions of Euros for a business transaction would you piss about pulling a fib retracement in MT4? More likely you'd say to your bank, "Yo la' giv uz X millyin euros".

They would then fill the order incrementlly at the nearest level with loads of volume. Most likely at the nearest 00 level. Which is why (I think) the market hovers around the "psychological" levels.

I guess it would be unfair to claim that's the whole story.
Speculative money seems to have a big effect on the short term moves in the market.
Take last weeks farcical swings in th EUR/USD. Clearly the currency was being smashed down on high speculative volume.
  • #148
  • May 2, 2010 11:05am May 2, 2010 11:05am
Quoting Ted1983
Here is a simple way to use a retracement tool;

Current range is below previous range, therefore trend is down.
No magical order of nature hocus pocus.


Attached Image (click to enlarge)
Click to Enlarge Name: euro retracement tool -- Why 61.8 pct thread ii add.JPG Size: 61 KB
  • #149
  • May 2, 2010 11:09am May 2, 2010 11:09am
"Balances"- 0.5 is not a fib' ratio.

(Maybe I'm misunderstanding your annotations)
  • #150
  • Edited 11:28am May 2, 2010 11:14am | Edited 11:28am
Quoting Ted1983
"Balances"- 0.5 is not a fib' ratio.

(Maybe I'm misunderstanding your annotations)
Not arguing, each to their own. I put in where (counter)trend is, and noted that balance, whether or not it's a fib ratio, seemed to me to define an overall change from the first overall trend to the next one beginning.
'Fun' is only that: I switched from fibs to balance last March. Balance eventually made sense to me as an overall approach, since they're pairs.
  • #151
  • May 2, 2010 12:19pm May 2, 2010 12:19pm
Quoting Ted1983
Maybe you could put forward some logical arguments instead of leaning back and making smug proclamations like "silly and sad".
Yes, I saw your chart...it's much better than mine. I'll return all the money I made on the run down from the .786 to the -.27. Please, everyone, just ignore my posts here regarding the benefits of learning how to use fibs, they just don't work!
Attached Image (click to enlarge)
Click to Enlarge Name: eur1.gif Size: 14 KB
  • #152
  • Edited 12:31pm May 2, 2010 12:21pm | Edited 12:31pm
Quoting GEfx
Yes, I saw your chart...it's much better than mine.
Classic hidsight comparison. LOL
Mine is much better, it's entirely objective.

Look at the interim swings on yours that clearly missed the fib lines.

Also both of your "tredlines" are just eye candy because they haven't been confirmed.
You could class the reversal that completely missed the fibs as the 1st touch of the primary trenline I guess.
  • #153
  • May 2, 2010 12:32pm May 2, 2010 12:32pm
Quoting GEfx

I am amazed that the arguing continues here; silly and sad.
It seems to be mostly frustration, intolerance, and ignorance more than anything else.

Discussions about the pros/cons/existence of these ratios in the markets has been going on forever. People who can use them profitably, use them. People who can't, don't. Then there's the element who can't use them themselves but who feel the need to tell everyone who does use them that they're BS and they don't 'work'. Go figure!

I've seen similar arguments about moon cycles. Not my cup of tea personally but I've seen people use them sometimes with remarkable accuracy. It doesn't make them BS just because I don't have the interest or perhaps capacity to understand how to effectively integrate them into my own trading.
  • #154
  • May 2, 2010 12:32pm May 2, 2010 12:32pm
.
Attached Image
  • #155
  • May 2, 2010 12:34pm May 2, 2010 12:34pm
Quoting pipmutt
I've seen similar arguments about moon cycles. Not my cup of tea personally but I've seen people use them sometimes with remarkable accuracy.
Attribution bias + LOL sample size = Moon cycles suck.
  • #156
  • May 2, 2010 12:45pm May 2, 2010 12:45pm
Quoting Ted1983
.
Why? The market turn just short of the .618 and trend wall. On the 1H chart it was a pretty good trade opportunity. Did you miss it?
  • #157
  • May 2, 2010 12:47pm May 2, 2010 12:47pm
Quoting GEfx
Did you miss it?
Yeah I missed it.
But looking at it know there sure was a lot of resistance there.
Nothing to do with fibs you understand.
  • #158
  • May 2, 2010 12:50pm May 2, 2010 12:50pm
Quoting Ted1983
Yeah I missed it.
But looking at it know there sure was a lot of resistance there.
Nothing to do with fibs you understand.
If you're asking people to teach you how to use Fibs in your trading why not just come out and say it instead of all this nonsense, I'm sure someone will help you out if you ask nicely!

Or do a forum search, as Scotty said there are a few (supposedly profitable) traders using different variations, they're pretty easy to follow along.
  • #159
  • May 2, 2010 12:50pm May 2, 2010 12:50pm
Notice how important the 3267 area looks going into next week.

Coincidentally its the low of March 25th. Its amazing how many fib lines arrive there by accident isn't it?
  • #160
  • May 2, 2010 12:51pm May 2, 2010 12:51pm
Quoting pipmutt
If you're asking people to teach you how to use Fibs in your trading why not just come out and say it instead of all this nonsense, I'm sure someone will help you out if you ask nicely!
Which nonsense?
I think you'll have a hard time undermining the veracity of my posts.
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