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Why 61.8%?

  • #161
  • May 2, 2010 12:52pm May 2, 2010 12:52pm
Let me help you with this. Here is the scary thing you pointed out on your post on a 2H chart. As you can see, those darn fibs are still not helping a bit and everyone should know that they are BS, right?

Attached Image (click to enlarge)
Click to Enlarge Name: euro1.gif Size: 18 KB


Alert to everyone: this is snake oil salesman stuff!
  • #162
  • May 2, 2010 12:55pm May 2, 2010 12:55pm
Quoting Ted1983
I think you'll have a hard time undermining the veracity of my posts.
I'll let you know when I see some.
  • #163
  • May 2, 2010 12:56pm May 2, 2010 12:56pm
Stevie Wonder could see the number of swings you've chosen to ingnore.
Ray Charles could see the fact that all those swings are previous sup/res anyway.

Yes it is snake oil.

Your examples are just terrible.
  • #164
  • May 2, 2010 12:56pm May 2, 2010 12:56pm
I've always found that those people who claim fibs "dont work" can generally back up that claim with hard statistical data, whilst the ones who claim that they do, are limited to posting retrospective charts :-)

From the limited statistical research that I've undertaken on fibs I found that price simply does not cluster around fib levels any more than price clusters around any other randomly selected level.

I've seen a couple of studies undertaken by HSBC bank on the effectiveness of fibs, and their conclusion was that fibs are not statistically valid. On the few occasions that I've seen studies that showed weak evidence, the methodology for selecting swing highs and lows was completely arbitary, allowing researchers to retrospectively select points that best supported their hypothesis, and therefore completely unusable in real life. Having said that, IIRC, this "weak evidence" indicates that of all levels 61.8% is generally the most significant.

Sadly its a case of draw enough lines on a chart, and price will bounce off one of them.

There are also quite a few academic sites that debunk this fallicy that fib ratio's are commonly found in the natural world, as usual, its just a case of us trying to fit simple patterns to complex situations where no patterns exist.
  • #165
  • May 2, 2010 12:57pm May 2, 2010 12:57pm
Quoting pipmutt
I'll let you know when I see some.

Thanks mate.
  • #166
  • May 2, 2010 12:58pm May 2, 2010 12:58pm
Quoting Ted1983
Thanks mate.
You're welcome
  • #167
  • May 2, 2010 1:04pm May 2, 2010 1:04pm
Can we have some more naysayers please, we're not quite at the 95% yet.
  • #168
  • May 2, 2010 1:04pm May 2, 2010 1:04pm
TBH. I quite like the idea of using 38. whatever it is. Or a simillar number.

If you assume that volatility begets volatility then a retracement that ony makes it a 1/4 to 1/3 of the way back would imply serious stregth in the trend direction.
  • #169
  • May 2, 2010 1:05pm May 2, 2010 1:05pm
Quoting pipmutt
Can we have some more naysayers please, we're not quite at the 95% yet.
I was just thinking the same thing myself.,.

Also pipmutt, read your own undertitle.
  • #170
  • May 2, 2010 1:06pm May 2, 2010 1:06pm
Quoting Ted1983
I was just thinking the same thing myself.,.
Isn't two winks a blink?

Quoting Ted1983
Also pipmutt, read your own undertitle.
If you mean the parsimony one I don't need to, I wrote it, and that's why I use Fibs.....quite successfully I might add! I'm but a simple trader trying to earn a crust the simplest way I know how.

Out of interest Ted, what do you use in your trading?
  • #171
  • May 2, 2010 1:07pm May 2, 2010 1:07pm
Quoting pipmutt
Isn't two winks a blink?
LOL.

It was supposed to be a double, consecutive wink. Implying that 95% believe in the magical fibs.
  • #172
  • May 2, 2010 1:08pm May 2, 2010 1:08pm
You challenged me for some proof, and when I present it you call me blind. Others here repeat the findings of countless studies that prove the charts I present and my trading style are not significant. These are not retrospective charts, but actual trading charts that depict what was traded. FYI -- the idea is to enter on the retrace and add to or take profit as the market moves, and those levels are pretty obvious. If you have been following this train reck then you have a question to ask yourself: should you take the "expert advise" of those who denounce the use of fibs but have never added a dime to their book, or do you look to successful traders who use them in their trading and try to figure out how to incorporate them into your trading (if they are right for you)? Good trading to everyone and have a profitable week!
  • #173
  • May 2, 2010 1:17pm May 2, 2010 1:17pm
Quoting Razzle
I've always found that those people who claim fibs "dont work" can generally back up that claim with hard statistical data, whilst the ones who claim that they do, are limited to posting retrospective charts :-)

From the limited statistical research that I've undertaken on fibs I found that price simply does not cluster around fib levels any more than price clusters around any other randomly selected level.

I've seen a couple of studies undertaken by HSBC bank on the effectiveness of fibs, and their conclusion was that fibs are not statistically...
  • #174
  • May 2, 2010 1:19pm May 2, 2010 1:19pm
Quoting Ted1983

It was supposed to be a double, consecutive wink. Implying that 95% believe in the magical fibs.
Ah right, like 'nudge nudge, wink wink'.....got it.

You're good with statistics. The impression I get is the majority in this thread don't believe in the value of Fibs, I was looking for a few more to reach the magic 95% number then my job is safe in the knowledge that in a business where the majority lose I'm in the minority.

As if by magic, a Razzle showed up! We're getting there.....
  • #175
  • May 2, 2010 1:22pm May 2, 2010 1:22pm
Quoting GEfx
You challenged me for some proof, and when I present it you call me blind. Others here repeat the findings of countless studies that prove the charts I present and my trading style are not significant. These are not retrospective charts, but actual trading charts that depict what was traded. FYI -- the idea is to enter on the retrace and add to or take profit as the market moves, and those levels are pretty obvious. If you have been following this train reck then you have a question to ask yourself: should you take the "expert advise" of those...
GEfx,

People are warned to swim away from sinking ships, as they will pull down and drown all those in their proximity.

GE my friend, not everyone can be rescued, swim away.
  • #176
  • May 2, 2010 1:24pm May 2, 2010 1:24pm
Quoting GEfx
You challenged me for some proof, and when I present it you call me blind.
No, I said a blind man could see it wasn't actually proof, by any reasonable standard of thhe word.

Also, the naysayers just happen to be some of largest financial and academic institutions in the world. It's not just little old me.

Aswell, if you care to read my posts; I have said all along that there is nothing wrong with using ratios of ranges, but the fib ratios hold no more predictive power than any other.
  • #177
  • May 2, 2010 1:25pm May 2, 2010 1:25pm
Quoting pipmutt
The impression I get is the majority in this thread don't believe in the value of Fibs.
You got the wrong impression.
  • #178
  • May 2, 2010 1:25pm May 2, 2010 1:25pm
Quoting auxesis
GEfx,

People are warned to swim away from sinking ships, as they will pull down and drown all those in their proximity.

GE my friend, not everyone can be rescued, swim away.
LOL -- I have been rescued! Thanks auxesis, I owe you one! By the way, it occurred to me that we would be in trouble if your pup started sleeping on the stairs.
  • #179
  • May 2, 2010 1:25pm May 2, 2010 1:25pm
Quoting GEfx

Good trading to everyone and have a profitable week!
Yep, you too. As the saying goes 'you can lead a horse to water....'

Short week this coming week, Bank Holiday here in UK.
  • #180
  • May 2, 2010 1:27pm May 2, 2010 1:27pm
Quoting GEfx
LOL -- I have been rescued! Thanks auxesis, I owe you one! By the way, it occurred to me that we would be in trouble if your pup started sleeping on the stairs.
Unless he sleeps 61.8% between upstairs and downstairs

Maybe we could run a book....can we have a chart of his previous sleeping patterns on different time frames, or is he permanently in a range?
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