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Why do people use Fibonacci in trading?

  • #141
  • Apr 9, 2013 8:40am Apr 9, 2013 8:40am
Connect a swing top with the next swing top in a downtrend, then go short from the Golden Ratio below. Nah, fibs don't work at all.
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Time turns trend. - W.D. Gann
  • #142
  • Apr 9, 2013 8:50am Apr 9, 2013 8:50am
Same chart. Now connect a swing bottom with the next swing bottom for your Golden Ratio TP target. Nope, fibs don't work at all. They cannot be used as a trading tool.
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Time turns trend. - W.D. Gann
  • #143
  • Apr 9, 2013 8:58am Apr 9, 2013 8:58am
Quoting ForExtraPips
Connect a swing top with the next swing top in a downtrend, then go short from the Golden Ratio below. Nah, fibs don't work at all. {image}
well I did not really understand your fibs,
but check out the default MT4 fibs.....
surprisingly enough..they work quite perfectly
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  • #144
  • Apr 9, 2013 9:02am Apr 9, 2013 9:02am
Quoting Danny Maina
well I did not really understand your fibs, but check out the default MT4 fibs..... surprisingly enough..they work quite perfectly
See. Just think outside of the box. And what I meant about the Golden Ratio, put 1.618 and -1.618 in your fib tool and see what price does around there. And the inverse golden ratio 0.618 and -0.618.
Time turns trend. - W.D. Gann
  • #145
  • Apr 9, 2013 9:04am Apr 9, 2013 9:04am
When the dinosaur is above the rocket it's a sure sell signal. The dinosaurs become self-fulfilling prophecies when enough creationists believe in them. It also helps if you can find wally on the chart.

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Quoting ForExtraPips
Connect a swing top with the next swing top in a downtrend, then go short from the Golden Ratio below. Nah, fibs don't work at all. {image}
  • #146
  • Apr 9, 2013 9:08am Apr 9, 2013 9:08am
Quoting ForExtraPips
See. Just think outside of the box. And what I meant about the Golden Ratio, put 1.618 and -1.618 in your fib tool and see what price does around there. And the inverse golden ratio 0.618 and -0.618.
well...still don't get your fibs..how do you use them?
  • #147
  • Apr 9, 2013 9:13am Apr 9, 2013 9:13am
Quoting sandycarrot
Show the sell order through {image} {image}
Thanks Sandy for your post.
  • #148
  • Apr 9, 2013 11:11am Apr 9, 2013 11:11am
Quoting TranceTrader
When the dinosaur is above the rocket it's a sure sell signal. The dinosaurs become self-fulfilling prophecies when enough creationists believe in them. It also helps if you can find wally on the chart. {image}
oh shit. that's... yes. just, yes.
Congratulations ScalaFX for coming out of the closet!
  • #149
  • Apr 9, 2013 11:21am Apr 9, 2013 11:21am
I thought so too... turned out to be a false signal.

Quoting nubcake
oh shit. that's... yes. just, yes.
  • #150
  • Apr 9, 2013 11:45am Apr 9, 2013 11:45am
I don't use fibs much now but i used to use them for overbought and oversold areas, buying near 0 and selling at 100. I think the main reason people use fibs is because there is generally so much you can do with them. Every person i have spoke to have said different uses they find for them, some people use them for resistance, other people use them for no go areas, ie to spot ranges.
  • #151
  • Edited 12:11pm Apr 9, 2013 11:52am | Edited 12:11pm
Gefx, Gomes, DanUk, & Smikester.

Read their posts carefully, understand what they are saying.

If you can't trade with them, don't use them. Don't complain.

If you wan't to use them, then learn how to use them properly in your trading.
It never gets easier, you just get better
  • #152
  • Apr 11, 2013 11:28am Apr 11, 2013 11:28am
  •  traade
  • | Joined Apr 2013 | Status: the market knows every move u got | 14 Posts
I think that technical analysis is still a young discipline which is going to be around in the coming centuries. with regards to fib. analysis I think it is useful to some degree but I think it is overrated to a larger extent. I think that due to the limited but still growing amount of technical analysis tools, Fibonacci studies are experiencing a viral phase which is being fuelled by the rise of the emerging technologies like internet videos and computerized trading platforms which have preinstalled technical analysis tools. I once came across a video on youtube a long time ago which demonstrated how arbitrary or random support/resistance levels were chosen on random charts and it was quite intriguing how these levels seemed to hold in the projected future. I guess such phenomena will guarantee the semi-effectiveness of Fibonacci levels.
  • #153
  • Apr 11, 2013 12:06pm Apr 11, 2013 12:06pm
Quoting TranceTrader
When the dinosaur is above the rocket it's a sure sell signal. The dinosaurs become self-fulfilling prophecies when enough creationists believe in them. It also helps if you can find wally on the chart. {image}
But why the line on which the Dyanosor is standing is not straight with the axis?
  • #154
  • Apr 11, 2013 12:18pm Apr 11, 2013 12:18pm
That my friend is another signal that the market is over sold, I use it as a confluence indicator with the dinorocket indicator.

Quoting Red Herring
But why the line on which the Dyanosor is standing is not straight with the axis?
  • #155
  • Apr 11, 2013 1:07pm Apr 11, 2013 1:07pm
I just spotted this thread and can't resist a post....whilst its a couple of years since they were all the rage in FF, I still use them as a measuring tool.....yesterday evening I suggested that the 50% retrace - OK, its how I use the MT4 Fib tool - would be a good area for a buy. Here's this morning's chart.

BTW, I also have the Fib Time Zones set to 18, 29, 47, 61, 76 periods......anyone know why?
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Trading Levels with WRBs
  • #156
  • Apr 11, 2013 1:51pm Apr 11, 2013 1:51pm
Because the dinosaur is above the rocket?

Quoting Islander
I just spotted this thread and can't resist a post....whilst its a couple of years since they were all the rage in FF, I still use them as a measuring tool.....yesterday evening I suggested that the 50% retrace - OK, its how I use the MT4 Fib tool - would be a good area for a buy. Here's this morning's chart. BTW, I also have the Fib Time Zones set to 18, 29, 47, 61, 76 periods......anyone know why? {image}
  • #157
  • Apr 12, 2013 6:27am Apr 12, 2013 6:27am
Because it's very useful,especially when your time-frame is day or weekly chart .BTW,even if these traders of investment bank also use it .
  • #158
  • Apr 12, 2013 10:31pm Apr 12, 2013 10:31pm
Quoting Islander
I just spotted this thread and can't resist a post....whilst its a couple of years since they were all the rage in FF, I still use them as a measuring tool.....yesterday evening I suggested that the 50% retrace - OK, its how I use the MT4 Fib tool - would be a good area for a buy. Here's this morning's chart. BTW, I also have the Fib Time Zones set to 18, 29, 47, 61, 76 periods......anyone know why? {image}
Can you specify at which price to buy as per the chart?
What is meant by Fib Time Zones set to 18, 29, 47, 61, 76 periods? Month or week or days?
  • #159
  • Apr 13, 2013 2:52am Apr 13, 2013 2:52am
Attached Image (click to enlarge)
Click to Enlarge Name: Fibo.GIF Size: 37 KB



This is a sell setup of Fib. Can anybody explain me what should I look for and what is the selling price that I can understand from this chart. How this will be related to current market price since I need to fix my selling order at current market and this fib chart may be based on yesterday or earlier etc! Today's price range mat be different from that of the day fib chart was prepared! Then how actually fib. is signalling me the selling price here??
  • #160
  • Apr 13, 2013 3:40am Apr 13, 2013 3:40am
  •  FerruFx
  • Joined May 2007 | Status: MT4/MT5 EAs/Indicators/Alerts coder | 6,542 Posts | Online Now
Quoting Red Herring
{image} This is a sell setup of Fib. Can anybody explain me what should I look for and what is the selling price that I can understand from this chart. How this will be related to current market price since I need to fix my selling order at current market and this fib chart may be based on yesterday or earlier etc! Today's price range mat be different from that of the day fib chart was prepared! Then how actually fib. is signalling me the selling price here??
Generally when you defined your high and low point (0-100 fib levels), you wait for the price to retrace to a given level inside this range.

Your pic show the fib wrongly. I would have plotted the 0 at the low point instead of the high.
MT4/MT5 EAs/Indicators/Alerts coder
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