Why do people use Fibonacci in trading? | Page 13 | Forex Factory

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Why do people use Fibonacci in trading?

  • #241
  • Apr 18, 2013 2:21am Apr 18, 2013 2:21am
The attitude of traders toward this Fibonacci thing kind of reminds me of religion. Given enough faith the practitioners can come up with tons of rationale behind it.

You know what, having enough faith can really make it work for you. I am glad for the lucky ones for whom it did that with Fibonacci.
  • #242
  • Apr 18, 2013 2:21am Apr 18, 2013 2:21am
Quoting GnarlyPips
So, like, what's the point of the study? If a lot of people lose, maybe it could stop some people from losing by them knowing the chances of them losing is very high.
There is no point to the study, unless the study is valid. We do not know if a single study, carried by a single person, with no terms of reference is valid.




Quoting GnarlyPips
I haven't jumped on you all around FF, just posting about you getting after this guy
I am not "getting after this guy".....I am saying....(sigh...give me the strength).....that this guy keeps repeating this same old stuff for about 40 posts now but (read this slowly), the study is not valid, for the reasons I have given SEVERAL time now.


Quoting GnarlyPips
and in the news article where you claim that FF shouldn't post anything that isn't "forex related."
Which is my opinion, which you seem determined to not allow me to have. You have your opinion on the matter and I have mine. Stop arguing with me and allow me the right to voice my opinion in a public open forum.


Quoting GnarlyPips
Also, did you not read where I said where I said "I'm not saying that the numbers are true?" Relax.
Of course you're not, because you can't possibly know that....which is what we are talking about.
Doing what you like is Freedom. Liking what you do is Happiness.
  • #243
  • Apr 18, 2013 3:03am Apr 18, 2013 3:03am
Quoting realjumper
There is no point to the study, unless the study is valid. We do not know if a single study, carried by a single person, with no terms of reference is valid. I am not "getting after this guy".....I am saying....(sigh...give me the strength).....that this guy keeps repeating this same old stuff for about 40 posts now but (read this slowly), the study is not valid, for the reasons I have given SEVERAL time now. Which is my opinion, which you seem determined to not allow me to have. You have your opinion on the matter and I have mine. Stop arguing...
>stop arguing with me
>allow me the right to voice my opinion
Play the players, not the cards.
  • #244
  • Apr 18, 2013 3:12am Apr 18, 2013 3:12am
Quoting GnarlyPips
>stop arguing with me >allow me the right to voice my opinion

.
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Doing what you like is Freedom. Liking what you do is Happiness.
  • #245
  • Apr 18, 2013 3:52am Apr 18, 2013 3:52am
[quote=kbp;6565304]I have been questioning myself again and again for a long period of time about Fib retracement. There is no logical explanation of why it works/does not work. The most answer from people is: "because everyone uses them".

This is precisely why they will aid you greatly if you know how the market reacts to them. In trading, the market moves in accordance with the number of traders either buying or selling, if one accedes the other, then price will move in the direction of the greatest weight of people either buying or selling. Fibonacci provides levels where people will look to terminate positions, though they will look at the position of moving averages and price action behavior as well to form their judgments. Time and again you will see pa respect fibonacci levels, which will greatly aid in both entering and exiting positions. This is why people use them, not because they have any value unto themselves, for they are just mathematical calculations, but because most traders use them, they are self-fulfilling, they work because people use them, and people move the markets, nothing else. You cannot use fibonacci in isolation, just as you cannot use say RSI in isolation, but with a coherent trading strategy that uses a combination of at least a few of the most widely used indicators, you can give yourself a significant edge.
  • #246
  • Apr 18, 2013 3:59am Apr 18, 2013 3:59am
[quote=cat;6616251]
Quoting kbp
I have been questioning myself again and again for a long period of time about Fib retracement. There is no logical explanation of why it works/does not work. The most answer from people is: "because everyone uses them". This is precisely why they will aid you greatly if you know how the market reacts to them. In trading, the market moves in accordance with the number of traders either buying or selling, if one accedes the other, then price will move in the direction of the greatest weight of people either buying or selling....
This theory is useless as well.
  • #247
  • Apr 18, 2013 4:13am Apr 18, 2013 4:13am
[quote=Philt;6616275]
Quoting cat
This theory is useless as well.
Why exactly?
  • #248
  • Apr 18, 2013 5:06am Apr 18, 2013 5:06am
Best Fib-R value is around one-half.

Don't use in isolation. Better use additional candlestick(s) as comfirmation(together with Fib-R) for trade entry.
  • #249
  • Apr 18, 2013 5:12am Apr 18, 2013 5:12am
If everybody believes in a signal, and I mean everybody, then it is self fulfilling.
If a 61.8 fib with supporting support or resistance says buy and tons of people buy for that signal alone then it works.
Making money while you sleep, gotta love it.
  • #250
  • Apr 18, 2013 5:20am Apr 18, 2013 5:20am
Quoting ViperLead-01
If everybody believes in a signal, and I mean everybody, then it is self fulfilling. If a 61.8 fib with supporting support or resistance says buy and tons of people buy for that signal alone then it works.
No need to use 61.8

Value anywhere from 50 to 60 will be useful.

55.0 is quite good
  • #251
  • Apr 18, 2013 5:34am Apr 18, 2013 5:34am
Quoting Felix L
No need to use 61.8 Value anywhere from 50 to 60 will be useful. 55.0 is quite good

just an example, any well used signal can be self fulfilling
Making money while you sleep, gotta love it.
  • #252
  • Apr 18, 2013 5:47am Apr 18, 2013 5:47am
Quoting Felix L
No need to use 61.8 Value anywhere from 50 to 60 will be useful. 55.0 is quite good
And 43 is rather nice as well! I mean, what a load of rubbish some of you guys are talking. The main levels are 38.3% - 50% - 61.8% - 76.4%. I used 61.8% this morning to enter and exit an ej trade very successfully as part of my strategy, so this is a concrete example and not just theory or waffle. Bring up a 3 min chart and find the powerful upward move at 04.45am London time this morning.It then retraces back down to 12,813, before making a move up again. This is where I plotted my fib to see where it would stop, and you'll see, bang on 61.8% to the pip. One single confirmation black candle and I sold, all the way down to the 61.8% fib ( 12,763 ) anchored from this morning's low at 12,716, 60 pips before I'd even had my coffee. If you ignore fibonnaci levels, the big ones, then more fool you!
  • #253
  • Apr 18, 2013 6:03am Apr 18, 2013 6:03am
[quote=cat;6616328]
Quoting Philt
Why exactly?

In nature we have fractals which have the fibonacci relationship.

The market is fractal in its nature hence why there is a fibonacci relationship to this, hence why it works.

Thats the simplest explanation to it, i could go on further but theres no point, if you see what i mean.
  • #254
  • Apr 18, 2013 7:23am Apr 18, 2013 7:23am
Quoting Philt
In nature we have fractals which have the fibonacci relationship. The market is fractal in its nature hence why there is a fibonacci relationship to this, hence why it works. Thats the simplest explanation to it, i could go on further but theres no point, if you see what i mean.
That is the first argument on this subject that looks like it might have an actual mathematical basis behind it.

However, while the Fibonacci sequence gives rise to some fractal functions, not every fractal is Fibonacci-based. So the connection may or may not be there.

I am actually quite interested to see your arguments about why price action can be considered a Fibonacci-based fractal.

If you don't feel like sharing it in this public thread, could you please send me a private message? Thanks!
  • #255
  • Apr 18, 2013 7:25am Apr 18, 2013 7:25am
Quoting Fradix
That is the first argument on this subject that looks like it might have an actual mathematical basis behind it. However, while the Fibonacci sequence gives rise to some fractal functions, not every fractal is Fibonacci-based. So the connection may or may not be there. I am actually quite interested to see your arguments about why price action can be considered a Fibonacci-based fractal. If you don't feel like sharing it in this public thread, could you please send me a private message? Thanks!
ok, i'll be back this evening when i have more time.
  • #256
  • Apr 18, 2013 8:50am Apr 18, 2013 8:50am
Quoting MapleLeaf
Wrong?? I already asked you in another thread if you were doing a living TRADING RETAIL FOREX and you clearly EVADED the question, then you said that you are a CODER FULL TIME... So, why do you say im wrong? You are CONTRADICTING YOURSELF. Here we go again, to make it clear. FerruFx, do you make a living Trading RETAIL ONLINE FOREX every day? Did you make a living TRADING RETAIL ONLINE FOREX for the past 5 years? Don't contradict yourself, FerruFx, because people will see it. I would think a lot of times, before hiring a coder that contradicts himself......
Are you here to hire a coder? Interesting!!
  • #257
  • Apr 18, 2013 8:51am Apr 18, 2013 8:51am
Quoting Fradix
Fibonacci is the biggest myth persisting in the minds of traders worldwide for a long time now.
imagine you show your friend you have start trading forex

your friend asks: "what are these horizontal lines?"
you answer: "I'll make a trade if this price breaks this line"
friend: "why?"
you: "dont know... people just say it works that way"
friend: (oh no, I have a stupid friend... he's being scammed by other people badly... )
back... and more dangerous.
  • #258
  • Apr 18, 2013 9:01am Apr 18, 2013 9:01am
Quoting FerruFx
There's nothing to be learned with indicators. Observe how they react with the price. If this work for you, then fine, otherwise trash them. This must be a personal process as some indicators work for some but not for others ... and vice versa. But sure in any case you must understand PA.
Yes I am testing my understanding on PA with the forecast in some threads and forums. So far it matched and I am enjoying this fact!
  • #259
  • Apr 18, 2013 9:58am Apr 18, 2013 9:58am
Robert Prechter is considered the expert on the Fibonacci basis of price movement in markets. A precis of his findings (and the work of RN Elliott) in a paper: "The mathematical basis of History"

Another link which explores fractal manifestations and their being determined by the Fibonacci series and its ratios.
cryptocurrency everytime
  • #260
  • Apr 18, 2013 1:23pm Apr 18, 2013 1:23pm
E/U H1
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