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Why 61.8%?

  • #261
  • May 3, 2010 1:25pm May 3, 2010 1:25pm
Quoting waves
M15 Ted????? no wonder you can't use fibs or draw them from the right spots.......they will work on a 15, but you had better have it drawn from a longer term chart with alot more data to be consistant.....I can't remeber the last time I looked at a M15.........I like to enjoy my days, not sit in front of a comp praying for todays set up.........
Sweet electrical Jesus, man. Thats exactly what I said. The M15 was just a "zoom in", as it were.
Also what I drew wasnt a fib.

edit: It was my own proprietary setup, which took over 10,000 hours of screen time to create.
  • #262
  • May 3, 2010 1:45pm May 3, 2010 1:45pm
Quoting Ted1983

In reality I have not demonstrated anything. Neither has GEfx.

To say I used the expansion sub optimally doesn't really make sesne.
If there is an optimal method then this would be statistically testable,
all tests show that no particular number has any more validity over the other.
Ted,

To be fair, this is a valid point. So far after 24 pages no one has really demonstrated to anyone who sitting is on the fence about fibs anything really concrete to work with.

All the studies I have seen have not proved that fibs do not work or vice versa, they have just demonstrated to me that a study of a tool used incorrectly will give results that are not really valuable and are a true case of a self fulfilling prophecy.

As I have said before, I would love to see a proper study of using fibs correctly but alas I have not seen one.

Anyway I think that even the traders that use fib successfully (I will include myself in that statement) will agree that fibs alone are about as useful as a chocolate teacup.

I am off to the dinner.

Regards
  • #263
  • May 3, 2010 1:56pm May 3, 2010 1:56pm
Nabi,

You're giving out way too much credit
Not everyone is as sensible as you appear to be.
There are guys out there who swear blind that fibs are some magical price predictors.

I'm off for dindins too.
  • #264
  • May 3, 2010 1:58pm May 3, 2010 1:58pm
Quoting Ted1983
Sweet electrical Jesus, man. Thats exactly what I said. The M15 was just a "zoom in", as it were.
Also what I drew wasnt a fib.

edit: It was my own proprietary setup, which took over 10,000 hours of screen time to create.
I wasn't talking about what you drew, from what I saw you bracketed a consolidation using a high and low, which isn't the use for fibs anyway........but nice effort......
  • #265
  • May 3, 2010 2:01pm May 3, 2010 2:01pm
Quoting pipmutt
For me, all of the above

There is no denying that the Fibonacci sequence exists, the question seems to be whether it exists in markets. There's no reason why it shouldn't, after all markets are made up of people, so if we're going to use ratios then why not use Fib ratios as reference points rather than just some arbitrary number?

Bottom line is I find they have an uncanny accuracy, particularly where there's confluence, too much to dismiss as just coincidence.

People use all sorts of weird and wonderful tools in their trading,...
Thanks for taking the time to reply. FWIW, I agree. I would guess that (a) and (b) are very likely to be true, while (c) remains unprovable.
  • #266
  • May 3, 2010 2:36pm May 3, 2010 2:36pm
Quoting waves
I wasn't talking about what you drew, from what I saw you bracketed a consolidation using a high and low, which isn't the use for fibs anyway........but nice effort......
No thats not what i did
  • #267
  • May 3, 2010 3:36pm May 3, 2010 3:36pm
Quoting Ted1983
......................
"Newsflash..........news means nothing"- You.
Can you explain the precipitous EUR/USD drop this week in terms of mathematical ratios?
.................
ExcusethatIinterfere.....61,8canlookonamiscellaneous
Substantiation: PivotPoint, Fibonachchiandmathematics.
http://s005.radikal.ru/i210/1005/2f/dbce892bcebd.png
Examplesinthehistory
[URL=http://www.radikal.ru]http://s47.radikal.ru/i117/1005/7f/da23a3d6bc34.png[/url]
[URL=http://www.radikal.ru]http://i054.radikal.ru/1005/d9/e7f4f291746d.png[/url]
Largerwave
http://i077.radikal.ru/1005/43/4fcd49f2c709.png
  • #268
  • Edited 4:16pm May 3, 2010 3:52pm | Edited 4:16pm
Quoting hanover
Thanks for taking the time to reply. FWIW, I agree. I would guess that (a) and (b) are very likely to be true, while (c) remains unprovable.
Agreed, (c) unprovable and probably beyond our ability to understand, 'meaning of life' and all that philosophical stuff.

'Any chart, any time frame' does seem to have an element of truth though, I was watching a news item on TV the other day and the presenter had some charts up of government funding to local authorities over the past x number of years, the same patterns and levels were clearly visible.

I guess it will remain one of life's mysteries, I'm just content exploiting it.....whatever 'it' is.




One for the unenlightened......

http://i41.tinypic.com/34ys4mw.jpg

  • #269
  • May 3, 2010 4:05pm May 3, 2010 4:05pm
Quoting Nabi
Ted

Just so I am clear, because I am not sure the point you are trying to make with your euro chart.

The retracement on the eurusd chart you posted missed the 38.2 fib by one pip on my data feed.

So after a 128 pip move this means that it missed the 38.2 fib by 0.78%,

Are you saying that fibs do not work based on them missing a retracement by 0.78%?

To be honest, if you want to pick an example of fibs not working then you could do better than picking a chart where the price misses the typical retracement point for this type of wave by...
You appear to be trading fibs same way i do, first and second targets met,
price has gone back to the make or break major S/R (dissected by lovely fluid bars 15 min's), more importantly 61.8% of new swing.
Continuation short from here (new trading set up, and opportunity) will see us targeting an Almighty confluence of extensions of long term fibs, square #'s, also providing me with levels where the current down move may prove to be a retracement for a new move long.
On the previous major multi day move of 600 pips in/ 600 pips out, targets were missed by 7 pips on the retracement, and 2 pips on target, i did not trade that, but it did provide me with structure for my intra day swings.
Only fibs could explain the relative precision by which such multi day move ended.
Some people here mentioned studies proving fibs don't work, i could be mistaken, but i cannot see how you can reliably test such complicated relationship between multiple moves reliably.
Over and out,
Nazi.
Biggest joker
  • #270
  • Edited 4:59pm May 3, 2010 4:28pm | Edited 4:59pm
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...
My Thoughts: Fibonaci as nothing to do with that,
You have to understand human nature behind price action, here what is happening in the mind of trader, let assume we are having a down rally, as soon price staled buyer are starting to look for reverse up, if enough buyer get in price start to retrace back up, now every one that stay on the side looking for more confirmation, they will buy in as soon price keep going back up, now price move higher from all these new buyer, now the crowd start to noticed and some start to closed there sale to keep profit from the down move wich bring more upside move, now what happen when price have enough momentum to reach pass the 50fib level, everybody is looking at a possible double top to happen near so if the bank the real buyer are not in everybody start closing there buy afraid of the possible double top coming
so price just shoot back down from 61fib because it is just 1/3rd of the last high so everyone get out. not because the 61fib but because they know price will react when it reach the previous high so they get out early to make sure..

Just my two cent
  • #271
  • May 3, 2010 4:28pm May 3, 2010 4:28pm
I may be missing the point here, but, for example, if I had invested all my early trading studies in Elliot Wave Theory and, in spite of that, managed to make a profit because incidentally I became an experienced trader with an eye for price action then I would be reluctant to ditch all that Elliot Wave learning.

In a similar way the 20th century was devoted to a search for nuclear power and they still haven't got it right but never mind we might as well keep trying now we have 20 billion tons of toxic waste which needs guarding for the next 36,000 years. Not a very good analogy?

Fibs are a great measuring stick and we do need one that everyone uses but they don't always work because someone at Barclays will always want to exchange a few hundred million for Toyota just before the London close. Let's not turn the fibs argument into the right and wrong, though. I would prefer to use feet and inches - much more logical. 12 inches in a foot, 3 feet make a yard, and so on. Also 1 foot is roughly the length of a man's foot. And the distance a bee flies at full speed before taking a breath.

That's me done on the subject. Anyone who is fanatically for or against has my sympathy.
Gone to a better place
  • #272
  • May 3, 2010 4:41pm May 3, 2010 4:41pm
Fibonacci numbers are seen in nature, such as in branching of trees, in pineapples, pine cones, etc. It is no coincidence that the golden ratio (61.8) was used by painters in the Renaissance. So asking if these numbers when used in trading are natural or a self-fulfilling prophecy, would be kinda like asking what came first, the chicken or the egg? Fibs don't always work though, just like all harmony in nature is eventually interrupted by chaos.
  • #273
  • May 3, 2010 5:14pm May 3, 2010 5:14pm
The ubiquitous fractals are seen in all walks of nature. They have been said to be seen in brain structure, clouds, and even heart beats. Markets are said to be fractal, therefore the markets must follow cloud structures. They don't always work though...
  • #274
  • May 3, 2010 5:31pm May 3, 2010 5:31pm
This thread is an encyclopedia of bad thinking and out and out shilling, Carl sums it up better than me...

Inserted Video
The breaking of a wave cannot explain the whole sea.
  • #275
  • May 3, 2010 7:47pm May 3, 2010 7:47pm
Quoting jamjamjam
The ubiquitous fractals are seen in all walks of nature. They have been said to be seen in brain structure, clouds, and even heart beats. Markets are said to be fractal, therefore the markets must follow cloud structures. They don't always work though...


Also Carl Sagan is (was) the man! Nice one Craig.
  • #276
  • May 3, 2010 7:51pm May 3, 2010 7:51pm
Quoting smikester
Anyone who is fanatically for or against has my sympathy.
I'm just fanatically against those who are fanatically "for".
  • #277
  • May 3, 2010 8:29pm May 3, 2010 8:29pm
Quoting jamjamjam
The ubiquitous fractals are seen in all walks of nature.
Just out of morbid curiosity, where do you get these ridiculous ideas from ?
  • #278
  • Edited May 4, 2010 1:13am May 3, 2010 9:45pm | Edited May 4, 2010 1:13am
Quoting Razzle
Just out of morbid curiosity, where do you get these ridiculous ideas from ?
Well, firstly, I assume you understood my comment was sarcastic (with regards to markets, logic, and prognostication applied in prior posts).

Secondly, you might want to look up the meaning of fractal geometry; as aside from market soothsaying (although, inherent in market structure as well), the concepts are all soundly based in rigor and science.
  • #279
  • May 3, 2010 10:07pm May 3, 2010 10:07pm
61.8% is derived from the sequence of natural order. That's why.
  • #280
  • May 3, 2010 11:43pm May 3, 2010 11:43pm
Quoting jamjamjam
Well, firstly, I assume you understood my comment sarcastic (with regards to markets, logic, and prognostication applied in prior posts).

Secondly, you might want to look up the meaning of fractal geometry; as aside from market soothsaying (although, inherent in market structure as well), the concepts are all soundly based in rigor and science.
To many traders here, fractal means 'BW fractal'
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