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Why 61.8%?

  • #321
  • May 4, 2010 10:15pm May 4, 2010 10:15pm
Quoting Trader KGB

Niall O’Connor, a technical analyst at JPMorgan Chase & Co. in New York.
JP who? Never 'eard of 'em, probably some clueless outfit selling snakeoil.....
  • #322
  • May 4, 2010 10:15pm May 4, 2010 10:15pm
it's charming how smug we all are.

smug = right.

neeeey.
Congratulations ScalaFX for coming out of the closet!
  • #323
  • May 4, 2010 10:18pm May 4, 2010 10:18pm
Quoting Craig
With all due respect, I have to disagree. I make no claims to have a conduit to the universal truth here, there are many ways to achieve a given goal, but I have talked to a number of very successful traders and one of the common things they shared was an unambiguous definition of what their entries consisted of, there were no 'grey areas'. This was vital to keeping an accurate record of how any particular system was performing. I certainly don't see using high school statistics to track trading progress or properly defining an entry as getting...
Fair enough...
Biggest joker
  • #324
  • May 4, 2010 10:40pm May 4, 2010 10:40pm
until the day comes that a trader can clearly define WHY their 'tools' work then all they are doing is e-wanking while it works, and then keeping quiet when it doesn't. "you need to draw the fibs correctly", err ok then how does one draw them correctly so that they have some actually meaning and are not some arbitrary range? "they aren't exact to the pip", so why bother at all as I for one can eyeball with enough precision to see where an imprecise 'level' is without requiring my magic fib tool? why do fibs apparently work, if they do at all? so far we see a lot of "i took this trade from the blahblahblah and clearly this is a blah trend with blah blah blah.... and i'm blah blah in profit. so what was your defined "i fkd up and i must exit" level at? if it went the wrong way would you be giving reasons as to why or would you just be keeping quiet? after a few hundred to thousand trades is it still a tool bringing you profit (if it is the tool that is doing so in the first place)?

i can fluke a trade off any tool you want and dance the victory dance proclaiming why it works. ask me to give you a reason why it works and i will have nothing to say. with so much guessing as to why this tool works or why that tool works, which includes fibs, then how can you know when it won't work or if it ever worked and you have simply been fortunate... or as I clearly spelled out and another poster has alluded to, perhaps it is simply due to a completely different factor that has been playing favorably into the way you have used your 'tool'.

so much speculation for something that is so apparently right smells worse than an eggy dutch-oven.

"BECAUSE IT WORKS!" is not an answer, it's a display of faith.
Congratulations ScalaFX for coming out of the closet!
  • #325
  • May 4, 2010 10:52pm May 4, 2010 10:52pm
Quoting pipmutt
Déjà vu, haven't we already done this bit a few pages back?
probably. but all i've noticed is a lot of hearsay and guessing. nothing has rocked my world so far and it's all been fairly-much the usual same old forum noise.
Congratulations ScalaFX for coming out of the closet!
  • #326
  • May 4, 2010 10:59pm May 4, 2010 10:59pm
Quoting nubcake
until the day comes that a trader can clearly define WHY their 'tools' work....
Déjà vu, haven't we already done this bit a few pages back?

Ultimately isn't any (technical) analysis tool just trying to identify prices/areas where there's a probability of more sellers than buyers or vice versa? If it's right then it's identified those prices/areas correctly. If it isn't, then it hasn't.

If you're trying to get a definitive answer about what motivates traders to buy or sell then we could be here a while!
  • #327
  • May 4, 2010 11:12pm May 4, 2010 11:12pm
Quoting pipmutt
Déjà vu, haven't we already done this bit a few pages back?

Ultimately isn't any (technical) analysis tool just trying to identify prices/areas where there's a probability of more sellers than buyers or vice versa? If it's right then it's identified those prices/areas accurately. If it isn't, then it hasn't.
yeah sure, but can anyone tell me why they think there might be more of one or the other? is it because some pretty indicator says so? why doesn't someone come up with a tool to represent Pi or something? I'd give it a trial go just for the fun of it (so to speak).

if we simplify the situation massively and say that there is 1 big bad trader with a lot of cash to move is sitting in a golden tower somewhere looking at an MT4 terminal (lol, how cool would that be) and is deciding which way he wants to move the market, what conversation would he have in his head when about to do this and why would he look at a fib tool?

firstly i'd suggest this to be ridiculous (the fib tool part). but then again perhaps it would make sense in that if it's me in that position perhaps I would look to fibs because I know others happen to be, and from this if I give the market a little nudge in the right direction at the right level then hopefully others will catch-wind of this, and from there my little nudge will get some help from the small fish in retail who don't actually move the market but at least I can off-load some volume I just gained in nudging the market... like pushing off the wall of a pool and then letting the after-current bump you a little further.

maybe, just maybe if I keep hitting these numbers people will catch-on and see what i'm doing and try to swim with me... and this will be self-fulfilling (as some suggest).

but is this reality?

why is it that people need to learn how to "draw fibs correctly" if this is the case? why make it difficult to see if you want people to see it? this shows me that this theory is simply wrong. is reality that markets simply move where they need to move to?

so what's the real reason fibs supposedly work for some and not for others? what black majick makes it the devils plaything and increases his account where others only lose money? why are some apparently enlightened, but don't seem to be able to give a meaningful reason as to why fibs are $'s?

if something is that hard to explain, then is it real or just imagined?
Congratulations ScalaFX for coming out of the closet!
  • #328
  • May 5, 2010 12:11am May 5, 2010 12:11am
Quoting nubcake

if something is that hard to explain, then is it real or just imagined?
In markets made up of people with countless motives and emotions I'm not sure you can fit everything neatly into little boxes just for your own convenience, don't forget we're trading on probabilities not certainties.

Looking at it logically, and knowing as most traders do that these levels exist and are watched, if you wanted to get in on a trend where would be a good place to enter? If you're looking to take profit where would you be likely to look at taking it?

As for drawing Fibs 'correctly' I would say the most obvious swings are a good place to start, and then to increase probability find areas of confluence where levels from different time frames may converge, as retracements and/or areas of profit taking, areas where there's a probability traders will be trading. You'll often find these levels converge with other significant levels such as support or resistance. All you're trying to do is find areas where there's a probability of more buyers than sellers, when you actually think about it that's all any analysis is trying to do.

If you do a search on YouTube you'll find thousands of examples of Fibs being used in various markets, they're a relatively simple and easy to understand concept.

Like I've said before, what you use isn't really that important in my opinion, it's how you manage trades and risk which separates the successful from the unsuccessful. Fibs are just another tool and like any craft the end product is the result of the skill in using those tools more than the tools themselves.
  • #329
  • May 5, 2010 12:18am May 5, 2010 12:18am
Sorry, couldn't help myself...


.
http://tinyurl.com/2epx8vw
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #330
  • May 5, 2010 12:21am May 5, 2010 12:21am
Quoting LasVahGoose
Sorry, couldn't help myself...

I think we need to do some practical research in the field....where's the nearest beach!
  • #331
  • May 5, 2010 12:45am May 5, 2010 12:45am
Quoting pipmutt
I think we need to do some practical research in the field....where's the nearest beach!
in the kitchen where she belongs!

personally i'm not convinced there is such a thing as probabilities in markets, at least not in the sense that the term is used 99.99% of the time in forums and which you have used it.

i guess it's the same question as to why one trader decides that a 15sma is his cup of tea whereas another finds a 44ema to be the ducks nuts. why these random numbers? what makes them so special? again, i believe it's nothing to do with the numbers and more to do with under-trading and the way in which people use their 'tools' that results in under-trading. but, i'm speculating.

i mean it's one thing to say "the big boys use them", and it's another for it to be actual fact. to be a fly on the shoulder of someone moving serious capital...
Congratulations ScalaFX for coming out of the closet!
  • #332
  • May 5, 2010 1:24am May 5, 2010 1:24am
Quoting nubcake
personally i'm not convinced there is such a thing as probabilities in markets
Well they can't be certainties, there's no guarantee price will move in a particular direction, that would just seem to leave what, total randomness?

Quoting nubcake
under-trading and the way in which people use their 'tools' that results in under-trading.
under-trading?

Quoting nubcake
i mean it's one thing to say "the big boys use them", and it's another for it to be actual fact.
The likes of JPMorgan Chase not big enough for ya?
  • #333
  • May 5, 2010 1:31am May 5, 2010 1:31am
Quoting pipmutt
Well it can't be certainty, there's no guarantee price will move in a particular direction, that would just seem to leave what, total randomness?
maybe, but more so that there are better reasons for someone who is going to actually send volume through forex to do so than because it hits a fib level.

Quote
under-trading?
yes, under-trading. can't think of a better way to describe it, and don't want to get into the details as it's merely a concept that is sitting on my brain nagging me to properly test.[/quote]

Quote
The likes of JPMorgan Chase not big enough for ya?

who says they speak the truth though? to read it and to see it in action... chalk and cheese perhaps. misdirection perhaps. refer to paragraph 1 above.
Congratulations ScalaFX for coming out of the closet!
  • #334
  • Edited 2:02am May 5, 2010 1:51am | Edited 2:02am
Quoting nubcake
maybe, but more so that there are better reasons for someone who is going to actually send volume through forex to do so than because it hits a fib level.
Sure, that might not be their motive for the trade but they have to enter/exit somewhere, why not at universally recognised levels?


Quoting nubcake
who says they speak the truth though? to read it and to see it in action... chalk and cheese perhaps. misdirection perhaps. refer to paragraph 1 above.
Seriously, you think they may have a hidden agenda behind talking about levels being broken and downside risk? Research notes to clients aren't sent with the intention of misleading, they'd lose all credibility.

The only people I've seen move the FX market with rhetoric or jawboning have been central banks, and even then market reaction is often only kneejerk and temporary.
  • #335
  • May 5, 2010 1:59am May 5, 2010 1:59am
Quoting pipmutt
Sure, that might not be their motive for the trade but they have to enter/exit somewhere, why not at universally recognised levels?
and why not at any other level? that is the main question i have, really.

Quote
Seriously, you think they may have a hidden agenda behind talking about levels being broken and downside risk?

The only people I've seen move the FX market with rhetoric or jawboning have been central banks, and even then market reaction is often only kneejerk and temporary.

*shrug* don't know. too tired to put the head into it, but if it doesn't make immediate sense (which fibs do not) to me then i'm not buying. there's a lot of noise on television and in papers (and on forums), so whether it's speaking bs on purpose or simply due to lack of information then what does it matter... one must be open to the possibilities of eating a turd sandwhich, no matter how pretty the girl handing it to you is.
Congratulations ScalaFX for coming out of the closet!
  • #336
  • May 5, 2010 2:09am May 5, 2010 2:09am
Quoting nubcake
and why not at any other level? that is the main question i have, really.
Those too probably, they're not just trying to get one lot filled with a bucketshop, they're working orders in the actual market.

Quoting nubcake
*shrug* don't know.
Yep, I think we'd gathered that much
  • #337
  • May 5, 2010 2:09am May 5, 2010 2:09am
Quoting nubcake
and why not at any other level? that is the main question i have, really.
50% is a level of equilibrium after a retracement following a clear trend. So, if somebody would tell me "Trade fibs or I'll shoot you!" (because there's no other sane reason to use fibs), I'd look at that level.
  • #338
  • May 5, 2010 2:17am May 5, 2010 2:17am
Quoting Sauron
So, if somebody would tell me "Trade fibs or I'll shoot you!" (because there's no other sane reason to use fibs), I'd look at that level.
Well no-one's got a gun to my head so I guess that just makes me insane

ergo, insanity is profitable!

You heard it here first!


Anyway it's time for my medication so I'm outta here....have a great day all

.....nurse!
  • #339
  • May 5, 2010 2:37am May 5, 2010 2:37am
Quoting Sauron
50% is a level of equilibrium after a retracement following a clear trend. So, if somebody would tell me "Trade fibs or I'll shoot you!" (because there's no other sane reason to use fibs), I'd look at that level.
i dont know you well enough to dislike you enough to impose fibs on you
Congratulations ScalaFX for coming out of the closet!
  • #340
  • May 5, 2010 5:33am May 5, 2010 5:33am
I'll give you guys a piece of the answer, I'm not a good enough typer to give it all here.........QUESTION: do you believe humans in mass, say 1 million are predictable? i.e. pick any city of 1 million....you will be able to predict with very good accuracy....the crime rate, homeowners vs renters...how many will car pool, how many will commute alone...etc etc etc.........so if they are predictable in mass thru habits, and emotions in thier day to day pursuits, why are they not predictable in thier financial decisions??? Fibs are not exact, but the levels are within a tradeable range especially if you use longer term charts....I created a grid of numbers a few years back and when applied to 1 day charts they show all the major turning points the currencies make...to the pip? NO, but the average is within 50 pips of the grid #'s is 50 pips a tradeable range on a 1 day chart? I can explain under throw or overthrow easily by saying sheer volume is difficult to stop an a pip I would imagine most in here could at least agree on that. Fibonacci works because it is built into us, it is all around us, it is a natural law. Do you need to belive in natural law? heck no....you do not have to believe in gravity, but jump off a tall building and the natural law takes over and no matter who you are, you fall, you are subject to it wether you believe in it or not.
there are times to trade a hit on a fibo #, but guys that only rely on fibo touches to trade are out of thier minds and will go broke, no different than if you only trade using 1 conformation. Drawing fibos is not just drawing them from swing highs to swing lows, it is deeper than that, and like anything worthwhile, Fibonacci needs to be studied and learned to use effectively and consistantly. if it were easy and everything was swing high to swing low, 95% of the traders wouldn't be losers.........those of you that are not, and will never be believers....I have no problem with you..keep trading....it give me a leg up on you....those of you that will take the time and make the effort to understand, you will never regret it.........
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