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Indicator Free Trading - Skunny

  • #6,681
  • Aug 27, 2010 1:01pm Aug 27, 2010 1:01pm
Boy, if it wasn't Friday I wouldn't be having this much fun. I hope everyone is having a good one and hopefully a couple laughs.
  • #6,682
  • Aug 27, 2010 1:10pm Aug 27, 2010 1:10pm
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You ever see a shark's eyes when it bites into ya? They rooolllllll white and you hear that awful screamin'...I'll never wear a life jacket again.
  • #6,683
  • Aug 27, 2010 1:14pm Aug 27, 2010 1:14pm
Quoting bartstop
For those of you reading this thread, I can tell you that fibs DO WORK. It's tricky and takes a while to learn but this and the paradise thread are a gold mine of information. There's a lot more to it than what you will find here at FF but there's more than enough to get you started.
Call me ignorant, because I haven't put in the years of study that 3Dog talks about; and of course I can't possibly know now what I have yet to, or may never, learn.

But I can't buy into the idea of fibs as a predictive tool, simply because of the way in which market drivers operate: three major drivers being (1) response to (sometimes unexpected) economic news; (2) self-fulfilling prophecy; and (3) the need to maintain triangular equilibrium (e.g. GBPJPY = GBPUSD x USDJPY). Until somebody can explain to me how fibs (especially those 'pulled' in a way that very few heavyweight traders know about) take these primary drivers into account, I feel that I owe it to myself to remain skeptical.

I've posted my own chart as to why I suspect GU turned where it did. Self-fulfilling prophecy: orders placed by heavyweights, or amateur orders exploited by heavyweights, at levels that were obvious to all; as opposed to some secret formula that virtually nobody knows anything about.

If the purpose of your GU chart is to support your argument that fibs actually work, then don't you need to explain why you set the zero level of your blue fib where you did? I suspect that the average Joe (like me) can't see it. No disrespect, but doesn't that entitle skeptical minds to wonder if you placed it there for no reason other than its 38.2 level aligns with the price turn?

I guess Skunny's response to that would have been "study hard, and for as long as I have, and you'll eventually find the answer". But that's not really supplying proof that supports the assertion that's being made.

If the purpose of your GU chart wasn't to support your argument that fibs work, well, fair enough; but then why did you post it?

I know it probably sounds like I'm attacking you, and I apologize for that. I just feel that if somebody is going to make a statement that sounds too good to be true (Skunny said that a "moley-quail" 100% win rate was achievable if one knew where to pull the fibs from/to) then surely some proof is required, assuming the writer wants to be taken seriously. The billionaire traders (Tudor Jones, Cohen, Simons, Kovner, etc) would scoff at the idea of a 100% win rate. And look how many people took Jacko seriously, for example, and how that ended. Skepticism (until a theory is proven otherwise) is the only sensible way forward in this game, IMO.

This isn't a 'sour grapes' post, and I'm not looking to be spoon fed with color-by-number answers, as I've already found my own way to be profitable. If, like Skunny, you don't want to share your secrets in the public domain, then no problem: that's your prerogative. But those who keep secrets shouldn't expect others to take them seriously; if I said that I could walk on water, I wouldn't expect anybody to believe me unless I showed them the proof.
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  • #6,684
  • Aug 27, 2010 1:41pm Aug 27, 2010 1:41pm
Quoting hanover
Call me ignorant, because I haven't put in the years of study that 3Dog talks about; and of course I can't possibly know now what I have yet to, or may never, learn.

................I feel that I owe it to myself to remain skeptical.


If the purpose of your GU chart is to support your argument that fibs actually work, then don't you need to explain why you set the zero level of your blue fib where you did? I suspect that the average Joe (like me) can't see it. No disrespect, but doesn't that entitle skeptical minds to wonder if you placed it...
hanover you have two choices, as always....

1) Remain skeptical

2) Figure out why the fibs are placed where they are.


So far, ( a few years) you have remained skeptical, if you want that to change (which the fact you are paying attention to this thread) it is time to figure it out.

Only you can make that choice.

Barts fibs make perfect sense to me, very logical.
  • #6,685
  • Aug 27, 2010 3:34pm Aug 27, 2010 3:34pm
Quoting Eggster
Barts fibs make perfect sense to me, very logical.
Is this discernible from Bart's chart only, or do I need to look at the bigger picture?

You're right about the two choices, but you've sidestepped the questions that I asked.
  • #6,686
  • Aug 27, 2010 6:08pm Aug 27, 2010 6:08pm
Quoting Scotty B
I tell you what though, when you come to the point where you realize what I've said about trading fibs as a stand alone, message me and I'd be glad to point you in the right direction.
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I will submit one more things for the readers of this thread. Notice the attached GY chart with Southward spike. If anyone is to tell you sarcastically that there is no way you could have predicted that with a fib; don't walk, RUN. Run away.

Although I am NOT going to post my chart because, as stated earlier, I have no reason to do so, I am going to state that it bugs me when those who don't know something tell you "it can't be done". Believe me. Don't believe me. The choice is yours. I may not have as many vouchers as Scotty. Or Jacko. (for what that is worth). WAY TOO FUNNY IS THAT!!!!

Here is the deal. That bottom could have been known in advance. You could have traded to it. If you knew how. It is your job, if you choose to accept it (mission impossible music; please), to study this stuff, spend years required to do so, and then you will know. And then....you will also know more than those who do not. And you, neither, will feel any need whatsoever to prove yourself to them. And that is the way life has always been; and always will be. Period.

Mike Corleone
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Jeremiah WAS a bullfrog.
  • #6,687
  • Aug 27, 2010 8:50pm Aug 27, 2010 8:50pm
Quoting 3 Dog Night
Here is the deal. That bottom could have been known in advance. You could have traded to it. If you knew how.
Hi 'Mike',

Let's start by agreeing on two things:

1. Number of posts or vouches means absolutely nothing (that's one reason why I don't vouch for anybody). Heck, many professional traders can't even be bothered with forums.

2. It doesn't wash with me either when those who don't know something tell you "it can't be done". There are folk who believe that trading profitably can't be done, but I know that they're wrong. People with less knowledge aren't in a position to judge those who have more.


My own explanation for the bounce on your chart is simple. The spike was caused by a Bernanke speech (as listed on the FF calendar), and I'd guess that the selling pressure got partially absorbed by a raft of orders at the 130.5 level, while the orders placed at the level of the Asian session high two days earlier were enough to exhaust the move. So the end result is a flipover S/R (yellow arrows and dashed yellow line).

Could I have predicted that as being THE reversal point? Heck, no way. It was one of maybe 3 or 4 slightly higher probability outcomes. But if you look at GU, it reversed off a prior session high also, the confluence on the correlated pair improving the probability of major orders being stacked at that level. Just curious, did you have a fibo predicting the same bounce on GU?

The reservation I have with Skunny's (and others') fib theory is that their fibs aren't pulled off the most obvious highs and lows, hence they lack the visibility to generate the orders needed to create any kind of self-fulfilling prophecy. Or, to rephrase it as a question, how can a method that's known by only a handful of retail traders possibly have a gravitational effect on future market moves?

I don't buy any 'collective averaging' type theory where fibs (or any line study) is concerned. Markets turn at points where the LAST orders get filled, not at some average point – and we are talking precision forecasting here, right?

I agree that you're under no obligation to prove anything to anybody. But I likewise feel obliged to remain skeptical until my questions are answered. I'm not looking for a handout 'how to do it', but a sensible 'why it works' explanation, in terms of the way that markets operate. I've noticed that the discussion here frequently gets heated, but I'm not seeking an argument, just answers to questions that Skunny and his cohorts have previously declined to tackle. If nobody feels qualified to answer, I'll simply move on.

Good trading to you.

David
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  • #6,688
  • Aug 27, 2010 9:42pm Aug 27, 2010 9:42pm
This is the GY fib that is in question. The idea is to pull your fibs and wait for a reaction to happen. This fib looks real pretty, but I call it coincidental. Even in the inner circle, fibs fail. Thom posted a similar fib months back and said that GY was going way long, well, that never happened.

So after the bounce of the inner 38 level, the fibs boys would get long when they saw that. The question is when to enter the market. Risk increases with every pip the market gets away from your fib line. It is a regular practice for these guys to put their stops under those so called 'reactions.'

If you go back and look at Bart's chart, you can see a lot of movement around that fib and then finally the market touches off of it. That was one touch off of one very particular fib. What are chances you'd spot those moments on each fib? It is also common 'fib knowledge' that there are many different fibs working at the same time. Do you see the problem--the easy excuse to go into DD? Oh, I'm holding this trade because this cycle has to finish first..But as Dennis Gartman says, when down starts, you have no idea how far down might be...
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  • #6,689
  • Aug 27, 2010 10:06pm Aug 27, 2010 10:06pm
Here is the GY longer term failure..Same principles apply.
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  • #6,690
  • Aug 27, 2010 10:09pm Aug 27, 2010 10:09pm
Quoting Scotty B
This is the GY fib that is in question........It is also common 'fib knowledge' that there are many different fibs working at the same time......
SB, thanks for the explanation. I've attempted to draw the same fib in my attachment. As far as I can tell, the start point is the low at X, and then the fib has been stretched so that the 38/62 levels span across A to B. But why A, and not any of C, D or E, for example? And why B rather than F? If you'd rather not give the answer, please just say so; the usual "if you study this for several years you'll find the answer yourself" doesn't get me any closer.

The upper fibo level (0.0) seems to sit in no-man's land, at least to my uneducated view.

To me, it's simpler and more logical to see G as being a flipover of B, along with the other reasons that I gave in my previous post. There are lots of other S/R levels that were respected along the way, also.
_______________

[EDIT] The fib in your post #6689 makes more sense to me, i.e. coinciding the 0.0 point with an obvious local high gives the fib some real visibility.
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  • #6,691
  • Aug 27, 2010 10:27pm Aug 27, 2010 10:27pm
Quoting hanover
SB, thanks for the explanation. I've attempted to draw the same fib in my attachment. As far as I can tell, the start point is the low at X, and then the fib has been stretched so that the 38/62 levels span across A to B. But why A, and not any of C, D or E, for example? And why B rather than F? If you'd rather not give the answer, please just say so; the usual "if you study this for several years you'll find the answer yourself" doesn't get me any closer.

The upper fibo level (0.0) seems to sit in no-man's land, at least to my uneducated view.

To...
You've pinpointed why I don't like this fib style, David. There is simply too much going on. Because there are 'so many active fibs...all at the same time,' it's pretty subjective as to which one you want to follow. The golden word the fibsters use is "reaction." If a fib, any fib, is being 'respected' then it can be traded. The usual first step in the fib algorithm, if you will, is to pull your fib up from a low while catching all the pullbacks with the lower 38.2 level, all the while watching for reactions on the other fib levels. Once you see that a fib has reactive qualities, you wait for the market to use the fib again. Hmm, sounds a little like your everyday S/R trading to me.

The real gamblers might take a trade off of a 61.8 with no previous 'respect' off that level, but with respect off of the original 38 pullback and maybe the 50. This will be the argument that comes against my S/R comment.
  • #6,692
  • Aug 27, 2010 10:30pm Aug 27, 2010 10:30pm
Quoting Scotty B
So after the bounce of the inner 38 level, the fibs boys would get long when they saw that. The question is when to enter the market. Risk increases with every pip the market gets away from your fib line. ........ It is also common 'fib knowledge' that there are many different fibs working at the same time. Do you see the problem--the easy excuse to go into DD?
What the 'fibbers' are talking about potentially has a lot in common with the way that I trade at the moment, in that I likewise look for high(er) probability reversal areas. In my case it's not only ('conventionally' drawn) fibs, but a case of choosing setups where I can get as many other factors (candle high/low S/R; daily/session highs/lows; pivot levels; round numbers; trendlines; etc) between my entry and a tight SL. Then if price blasts thru all of these barriers, I take a small loss; if it bounces, I have a very low risk entry that frequently results in a high RR trade.

If we can find areas where a reversal - should it occur - is likely to be accurate to the pip, then it's easy to design an entry system around it, and the accuracy justifies an incredibly tight SL. If two or more of these points are clustered fairly close together, it can make sense to average down into them.

If I could find a way of pulling fibs that forecasted accurate reversal points more frequently, than the way that I currently do, then that would be an additional weapon that would fit neatly into my existing arsenal.
  • #6,693
  • Aug 27, 2010 10:36pm Aug 27, 2010 10:36pm
Quoting hanover
What the 'fibbers' are talking about potentially has a lot in common with the way that I trade at the moment, in that I likewise look for high(er) probability reversal areas. In my case it's not only ('conventionally' drawn) fibs, but a case of choosing setups where I can get as many other factors (candle high/low S/R; daily/session highs/lows; pivot levels; round numbers; trendlines; etc) between my entry and a tight SL. Then if price blasts thru all of these barriers, I take a small loss; if it bounces, I have a very low risk entry that frequently...
Your viewpoint makes sense, Hanover, especially if price is your primary input when it comes to making trading decisions.
  • #6,694
  • Aug 27, 2010 10:39pm Aug 27, 2010 10:39pm
Quoting Scotty B
Your viewpoint makes sense, Hanover, especially if price is your primary input when it comes to making trading decisions.
As a technical analyst, price, time, and (tick) volume, are the only data that I have.
  • #6,695
  • Edited 3:35am Aug 28, 2010 3:24am | Edited 3:35am
Here's a little tidbit to consider.

Orderflow moves price ( car ). Without it price sits still.
Fibs are the path it travels on ( road ).

Go ahead and 4-by across the freeway if that's how you want to drive.
Just don't get hit by a trucker doing 70+ .

G-G-D

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The market is like the matrix - it is you that must learn to bend
  • #6,696
  • Aug 28, 2010 4:07am Aug 28, 2010 4:07am
So why does the market follow fibs, if it infact does? What would cause the phenomenon?
  • #6,697
  • Aug 28, 2010 4:50am Aug 28, 2010 4:50am
Quoting Scotty B
So why does the market follow fibs, if it infact does? What would cause the phenomenon?
Good question. I don't have the answer... but I believe it is divine - the Lord's mathematical choice if you will in all that surrounds us.
I believe Skunny seemed to think the same.

But really does it matter? Do you have to know exactly how a car's engine works before you'll drive one?
We don't have to know why, just that it is.

You're a man of faith, yes? Think about that for a moment. Do you ask God to explain why to you before you will step in faith?
I think of that like a child (not referring to you, but the idea), Dad why? Because I said so.
The market is like the matrix - it is you that must learn to bend
  • #6,698
  • Aug 28, 2010 5:37am Aug 28, 2010 5:37am
Quoting GridTrader
Good question. I don't have the answer... but I believe it is divine - the Lord's mathematical choice if you will in all that surrounds us.
I believe Skunny seemed to think the same.

But really does it matter? Do you have to know exactly how a car's engine works before you'll drive one?
We don't have to know why, just that it is.

You're a man of faith, yes? Think about that for a moment. Do you ask God to explain why to you before you will step in faith?
I think of that like a child (not referring to you, but the idea), Dad why? Because I said...
Mark Ritchie tells a story of a guy who came down to the trade floor who's trading plan was pretty much "I'll do what ever the Lord leads me to do, I'll trust him to give me buy and sell signals..." As it turned out, the dude lost all his money and was gone within three weeks. He discounted the need to understand what he was doing.

A lot of folks say that the fibbonacci princples are found all around us, but many of the common examples cited do not actually follow fib ratios. It's a nice thought though.

About the car question...It depends on who's car it was and where I was going. If it was your car, sure I'll take it around the block, if of course it's a 71 Firebird Formula 400.

If, however, it's my car and I'm gonna drive it through the dessert with my family on board, then yes, I'd like to know how things work so that in the event something goes wrong I'm not just stuck and putting my family in danger. And such is the case with trading. When you are putting your capital at risk, i think it's only reasonable to know what's going on, to know what in the heck you're doing.
  • #6,699
  • Aug 28, 2010 6:20am Aug 28, 2010 6:20am
Quoting hanover
No disrespect, but doesn't that entitle skeptical minds to wonder if you placed it there for no reason other than its 38.2 level aligns with the price turn?
The blue fib has been there for a while.
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  • #6,700
  • Aug 28, 2010 6:26am Aug 28, 2010 6:26am
I think Scotty said something about fibs having horrible RR. I used to think that to.
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