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pivot points or fibs?

  • #1
  • First Post: May 29, 2006 8:31pm May 29, 2006 8:31pm
I have 2 questions....
Why do some people use pivot points and some people use fibs, or do they use them together?
Which is better ?
Oh and one more thing. When I try to use my charting tool to draw fibs ,often the prices levels are way to high or low to be included in the fib projection . How can you get a fib reading then?
  • #2
  • May 29, 2006 9:16pm May 29, 2006 9:16pm
Quoting randomlight
I have 2 questions....
Why do some people use pivot points and some people use fibs, or do they use them together?
Which is better ?
My personal view on this, is both.
Pivots are quite powerful. But if they also fall on an important fib support or resistance line a reaction is even MORE likely (and vice versa).
...add to that an historical support or resistance and it's even more likely again.

Just think of all those traders following pivots. And think of many traders who use fibs. All the traders who believe in Elliot wave etc. All thoughts on price direction agreeing to the same direction would be a pretty powerful move.

I find I get overloaded including too much on a chart. ...as much as I'd like my brain to able to cope with all techniques at once I find Pivots the most consistant with EUR/USD, but try to keep an eye fibs.

Quoting randomlight
Oh and one more thing. When I try to use my charting tool to draw fibs ,often the prices levels are way to high or low to be included in the fib projection . How can you get a fib reading then?
With MT4?? Did you know you can grab the scale on the right hand side of the chart and drag/zoom the scale up and down with the mouse?
Bundy's status today: "Waiting..."
  • #3
  • May 29, 2006 10:04pm May 29, 2006 10:04pm
Ive used both in my time, currently I still leave the pivots there though I use them somewhat less than I used to after doing some extensive backtesting. Both tools are useless if you cannot read price action and detect when a move is weakening around one of those levels, and if you can read price action, then you really don't need them for anything else other than confirmation.

I will now sit patiently and wait for niceguy777 to chime in on this one ....
You can quit and they won't care, but you will always know.
  • #4
  • May 29, 2006 10:52pm May 29, 2006 10:52pm
Quoting randomlight
I have 2 questions....
Why do some people use pivot points and some people use fibs, or do they use them together?
Which is better ?
Oh and one more thing. When I try to use my charting tool to draw fibs ,often the prices levels are way to high or low to be included in the fib projection . How can you get a fib reading then?
the best way to use fibs and pivots is to combine them. look for areas where a pivot and a fib form confluence and you have a very good area to base your final decision for a trade. there wont be as many trades but thats a good thing.
  • #5
  • May 30, 2006 12:07am May 30, 2006 12:07am
Use both. Don't rely on just one or the other.
- SAFE TRADING MONEY DUCK
  • #6
  • May 30, 2006 5:59pm May 30, 2006 5:59pm
Here's a contrarian view: Both fibs and pivots are crap!

Fibs: Let's say you see a 100 pip move and you draw fibs on it. Let's also assume that a fib "works" if you come within 5 pips (5%) of it. There are 5 major fibs (23, 38, 50, 62, and 78...with rounding if i may). Now, you get +/- 5 pips per fib and 5 fibs so out of a 100 pip move, you will declare that a fib "worked" on 50 out of the 100 possible pips. How is that useful? By the way, 50 isn't really a fib number, it's more like 48.6. I'm not sure how you want to work that out. Depending on who you ask, there are even more fib numbers between 0 and 100. After that, you get fib extensions.

Pivots: There are so many pivot calculations that it will make your head swim. Once you decide on one you have to figure out when to start the daily calculation. Is it midnight, 1700, what time zone? Pivots are for floor traders aren't they? Where exactly is the Forex floor? How reliable are pivots? When they are broken you just shrug your shoulders and pick the next one. Is that helpful? You got out at R1 and the market goes to R3. What happens when R3 is broken?

I would suggest that you would be better off studying price and stop trying to guess where everyone else is drawing their lines.

Best regards,
Phil
  • #7
  • May 30, 2006 6:34pm May 30, 2006 6:34pm
Quoting philmcgrew
Here's a contrarian view: Both fibs and pivots are crap!

Fibs: Let's say you see a 100 pip move and you draw fibs on it. Let's also assume that a fib "works" if you come within 5 pips (5%) of it. There are 5 major fibs (23, 38, 50, 62, and 78...with rounding if i may). Now, you get +/- 5 pips per fib and 5 fibs so out of a 100 pip move, you will declare that a fib "worked" on 50 out of the 100 possible pips. How is that useful? By the way, 50 isn't really a fib number, it's more like 48.6. I'm not sure how you want to work that out. Depending on who you ask, there are even more fib numbers between 0 and 100. After that, you get fib extensions.

Pivots: There are so many pivot calculations that it will make your head swim. Once you decide on one you have to figure out when to start the daily calculation. Is it midnight, 1700, what time zone? Pivots are for floor traders aren't they? Where exactly is the Forex floor? How reliable are pivots? When they are broken you just shrug your shoulders and pick the next one. Is that helpful? You got out at R1 and the market goes to R3. What happens when R3 is broken?

I would suggest that you would be better off studying price and stop trying to guess where everyone else is drawing their lines.

Best regards,
Phil
man i could not agree more. if i see price at a confluence area so what. if i see a price structure that confirms the confluence area may do what i think it will then its time to sit up and take notice. the accounts of those few that win a majority of the time are funded to a large degree by those that trade pivots and fibs blind.
  • #8
  • May 30, 2006 7:41pm May 30, 2006 7:41pm
Quoting james16
man i could not agree more. if i see price at a confluence area so what. if i see a price structure that confirms the confluence area may do what i think it will then its time to sit up and take notice. the accounts of those few that win a majority of the time are funded to a large degree by those that trade pivots and fibs blind.
I have to admit. Even though I believe in pivots very much, it's the price action (as Akuma first mentioned above ) that I have learnt to automatically "feel" that decides my trades. It's easy to underestimate how much my mind does in the background as far as recognising price patterns go.

I think it would be rare to find a successful trader who hasn't been "around" long enough to learn visual cues. There's just an element to this that HAS to be absorbed first.
Bundy's status today: "Waiting..."
  • #9
  • May 31, 2006 3:01pm May 31, 2006 3:01pm
Quoting Akuma99
Ive used both in my time, currently I still leave the pivots there though I use them somewhat less than I used to after doing some extensive backtesting. Both tools are useless if you cannot read price action and detect when a move is weakening around one of those levels, and if you can read price action, then you really don't need them for anything else other than confirmation.

I will now sit patiently and wait for niceguy777 to chime in on this one ....
Hey Akuma99! And here I am!!

I was talking to someone today who was wondering whether their daily pivot was accurate, and guess what - it wasn't as accurate as the Absolute Fibonacci that we both had on our charts.

Please understand, there are Fibonaccis which you place on your charts and can be misleading, or there are Absolute Fibonaccis that work all the time.

Is that right Akuma99?
The framework is there; we just have to work on our frame of mind.
  • #10
  • Sep 5, 2006 5:02pm Sep 5, 2006 5:02pm
Niceguy777,

Can I ask more about these Absolute Fibonaccis you are referring to? How can I calculate them or place them on my charts? Plus, you say they work all the time? hmmm something that works all the time is worth looking into.


Quoting niceguy777
Hey Akuma99! And here I am!!

I was talking to someone today who was wondering whether their daily pivot was accurate, and guess what - it wasn't as accurate as the Absolute Fibonacci that we both had on our charts.

Please understand, there are Fibonaccis which you place on your charts and can be misleading, or there are Absolute Fibonaccis that work all the time.

Is that right Akuma99?
Ride it like you stole it! Life begins at 25 Knots!
  • #11
  • Last Post: Sep 5, 2006 5:38pm Sep 5, 2006 5:38pm
Quoting HighAsAKite
Niceguy777,

Can I ask more about these Absolute Fibonaccis you are referring to? How can I calculate them or place them on my charts? Plus, you say they work all the time? hmmm something that works all the time is worth looking into.
I always answer this question with trepidation on forums, because it involves suggesting to the person that asks it that they buy my book - and that can be met with all sorts of different emotions! I can't describe the whole thing in a thread like this. That's why I wrote the book - it's honestly the cheapest and most efficient way of transferring the information to lots of people. Suffice to say that the framework is built on the charts, rather than using the Fibonacci in the conventional way, to specific baselines. It shows you specific patterns that currencies move by within a fluid framework, and specific points that you can trade to. This allows you to make pretty accurate predictions as to where they are going over different timescales. It also helps you to grow your comfort zone in trading, as you can make small or large trades using it. There's a whole load of stuff about it on the website, and here's an example of the kind of thing it shows you. It's the GBP/USD over the last 30 days. There are many things you can deduce from looking at this in conjunction with other fractals of the framework. I hope this helps.
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The framework is there; we just have to work on our frame of mind.
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