(binned per thread starter’s request) Fibo zones - the relation b

Hi everybody,
I'm starting this new trade because some months ago I've found a great piece of tool in another thread in this forum (high probability Fibonacci zones).
As I'm sure of the basic meaning of OHLC ratios in trading, that tool was just the cherry over the cake.
Indeed it is an application of Joe Jackson's method that is proven to be very effective; it is an excel calculator that is supposed to indicate the most probable direction that price will follow in the daily session and the levels at which you can expect the price to bounce back, and i can assure that it does its work very well with unexpected precision.
I'm using it for my real money trading since 3 months with very good results, but there are some features I still am struggling with to understand and unfortunately the thread where I found it is closed since 2010.
So the purpose of this thread is to find someone that knows this calculator in its whole details to explain them and , to improve the knowledge about it and the concept it is based on for all the people that have an interest in.
Of course the tool is attached for everybody.
Thks to all

mayby someone can make an indicator from the file you been puting in here?

well maybe, there already is a platform that has something very similar built in, ofcourse they ask you some fees...anyway you can have a free trial version for 30 days, if i remember well.
Just google it, it begins with fib.....traders
But the point is not to have an indi, believe me, it takes just 5min a day to load data; the main point is to master the concept that is very effective.

here is a good explanation of what I'm talking about

There are two opposit opinions about market behaviour: for some the market is completely randomness and for others is predictable.
What I think is that the truth is in the middle: the market follows some basic rules that we can calculate with high accuracy level but as it depends from humans psycological behaviour it is unpredictable too.
But the tip is that if we learn to know the predictable aspect of market behaviour then we are able to manage the unpredictable aspect of it; this is the reason why expert traders gain from the market while automated systems do not.
We can recognize the unpredictable phases of market because we can think, indicators, systems, EA's cannot think so they will work only when market is behaviouring like they have been built.
The clue is that there is a specific relation between the daily open/close and the previous highs and lows that allows us to know how prices will behave tomorrow with a very high precision

Interesting!

Could you pls upload your latest spreadsheet with figures for yesterday/ day before entered and state based upon that what you are looking for, actual zones and direction.

Thank you.

here are the calculations for today on EUR/USD

and here is the trade i took this morning earlier, now almost near to reach the target

Hey so much interesting job done thanks,
for this we have to see the excel sheet early in the morning before Europe market start?
it is work well with any currency?
what is difference between Yellow and Red calculator?

BTW on this trade on EU i was late...when you sleep you cannot fish

Hi vishaal,
The calculator is based on the daily close at 23:00 pm GMT, that is the reference time to calculate pivots too; furthermore I do not enter the market during asian session, first because i want to sleep (my time si GMT+1), second because the best times are between the opening of Frankfurt and London, then you can expect another pic in volatility at NY opening. Big boys are used to take position first at Frankfurt opening, then you will notice an explosion in volatility at London opening....but I'm sure most of you already know all that.
First of all, vishaal, i suggest you to keep a careful reading of the pdf I attached in my first post, there is a lot to know before you can use the calculator properly, unless you already know all this stuff.
Second, this is just a tool, a great tool in my opinion, but a tool, so you need anyway your own system to get all its best.... play with it and enjoy.

btw, as I wrote in my first post, this calculator is not a work of mine, I found it here in Forex Factory, but I agree it's a great piece of work.
I'm looking for the author of the man who posted it before because although I'm able to make it work there are some features I'm not sure how to use, and as it's my habit to know each detail of the tools I use I'd like to get in touch with someone able to give some further explanations.
Meanwhile it is anyway interesting to discuss about this concept, so I'm here to read all of you that would like to share their thinking.
Cheers

hi guys

Someone help me how can you set the fibo, because I have no fixed place to use fibo. Do I need to download any file fibo? how should I do it? how I need to set fibo to 500plus?

target hit just know, let's see if it can reach 10 pips further...then I'll be ready for a possible reversal

I do not understand what do you mean with..."set fibo to 500plus...", you do not need any fibo in your chart, calculator does everything. Please read the pdf before

Basing on what I've been able to understand reading the article attached, this statistical computation is based upon confrontation between yesterday's close and today's open. Specifically in which of their different "Fibo zones" each of them is located.
It has been developed for non-OTC markets, like S&P index in the paper.
I don't think it can be usefull in OTC markets like forex spot, where yesterday's close = today's open.

I think what the paper states is about the relation between YESTERDAY close and TODAY open, not between yesterday open/close/range.
Hope it helps.

I thank God and you for this info you provided in this thread. May God empower you to discover more on this. What gives u the assurance to BUY here when we have 2buys and 2sells from the charts you posted? Which of the chart did you use to make your decision? Thanks for your quick reply.

Hi,

On the original thread you mention, there is an indicator that automatically plots the required zones etc. Have you tried that?
Also I presume that GBPUSD calc referred to means that if you are trading EU then where GU gives same signals the trade probability is enhanced.

Looking at the spreadsheet, it seems that where trade signals are different on yellow/red, then it is worth looking at the 100 ma for direction. So, one of thestrategies could be to open a trade in the specified direction at start of the day, go for say 40 pips TP. Or, as suggested, close trade after 24 hrs.

What do u think?

Pardy

Dr ZULU,
at the begining I thought the same as you, BUT it is not that all. Finding the opening zone is not of interest in forex, of course, but this is only an aspect of the hole concept; the point is that considering OHLC of the last two days we can calculate the probabilities there will be that prices will close on the upside instead of the downside and vice versa and we also can calculate stops and targets based on volatility.
Putting it all together we have a reliable cue about what is happening not in the future but in the present day, that is the only thing we can try to understand, and this in my opinion is a great odd in our favor.
If you look at the calculator you'll notice that it doesn't count the open but only the close, as it has been built for forex; inside of it you also will find a back test made by the author on gbp-usd

Thank you Opeimpo....it's not God but the author that could empower us to discover more....maybe God could help me to get in touch with the author
about your question: in trading you cannot have any kind of assurance, you must think about probabilities.
When you have both buys or both sells it means the signal is strong so probabilities are very high; when you get buy and sell it means that prices could follow both the directions and when the volatility is high most often, after having triggered ..say..the buy target, they will reverse and trigger the sell target too.
It will be up to you to enter at the daily opening price or wait for the price to reach an extreme and going for the opposit extreme.
As i said this is a tool, you need to figure out how to integrate it in your own trading system, so i make my decision with my own system, but since I understood this concept I look at my system in a different manner, I mean now I look at my system as I should but I wouldn't.

Yes ofcourse....do you see? when you know what you are looking for, you will find it
Anyway I have it on my charts just for my comfort, it's not indespensible. The core is the calculation of probabilities.
Don't misunderstand, GBPUSD calc is just a casuality because the author made a back test on that pair. I use the calculator for all the pairs I trade.
Your reasoning could be anyway correct till there will be a direct correlation between GBPUSD and EURUSD, but correlations can change over the time, so a correlation based strategy is a loosing strategy in the long term.
The calculator has two strategies, the yellow one is more conservative, the red one is more aggressive. When you enter at the opening price level and you have a mixed signal could happen that price will take the direction against you for first and then recover toward the direction you are or maybe colud happen that will consolidate over the target in the opposite direction you are, that's true.
This is why you need your system to make your decision, this calculator is not your holy grail, neither your system is, it is a tool to increase odds in your favor, and in mine experience, it has been helpful to me to understand another big matter: systems and indicators are only tools, you must use them as tools, they are not your drivers, you are the driver.
In other words you have to know how to trade, understand how the market behaves, then you can be profitable with every system; if you do not know the markets there is no system or indicator or what else.
Hope this makes sense to you