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Which Fibo level do YOU use and why?

  • #41
  • Jul 1, 2013 2:51pm Jul 1, 2013 2:51pm
Quoting Afarensis
{quote} What indicator is better to use with fibo ? i like stochastic, timeframe 1hr?
I think you may have misunderstood whats being discussed here.
_
@gspajon
Do you only trade the 4h timeframe?
  • #42
  • Jul 1, 2013 4:13pm Jul 1, 2013 4:13pm
Quoting Good Lookin
{quote} ...gspajon Do you only trade the 4h timeframe?
I make my trading decisions based on the 4 hr time frame (FXDD is my broker). While I understand that the candles differ from one broker to the next, I find the 4 hr time frame is the best compromise between the slower daily and weekly charts, and the faster intraday charts.

That being said I am very conscious of what is going on "underneath" the 4 hr chart as well as where price is moving on the larger time frames. I use the "triple screen" concept and keep three charts side by side to give myself a good view point on a given market.

Clear as mud? Basically the 4 hr time frame is my "trading window" and the smaller and larger charts help me "see" what price is doing in both the smaller and larger view point.
  • #43
  • Jul 1, 2013 4:21pm Jul 1, 2013 4:21pm
Quoting Afarensis
{quote} What indicator is better to use with fibo ? i like stochastic, timeframe 1hr?
If stochastic works for you then that's great. In my experience ANY indicator is only averaging past data and has no predictive value (which is the point of using it). However if you see an overbought/oversold condition on your indicator that corresponds with a fib level, I encourage you to do a probability study of the condition to see if there is any probability of price moving in the anticipated direction. I think you will find there is nothing greater than chance (50/50).

I reiterate to anyone who cares to listen. No matter what "method" or "system" you use, there is a certain probability of success that is inherent in that method or system. You MUST find what that probability is and then design a rule set to take advantage of that, or you are just wasting your time. If you want to use ABC indicator or Elliot Wave theory and combine it with fibonacci levels, be my guest. But you without knowing what is probable and what is not, you're just gambling.

If that's the case, then chose a different game. At least Black Jack has a 48% chance of winning, and if you learn how to play those percentages you can get yourself thrown out of any casino. I prefer to go with a little higher odds.
  • #44
  • Jul 1, 2013 4:24pm Jul 1, 2013 4:24pm
[quote=gspajon;6788618 I find that price stops and reverses when there is confluence between a fibo level from the previous leg and a fibo level on the current retrace. I will do a study on this.


now your heading in a good direction. keep digging...
  • #45
  • Jul 1, 2013 4:35pm Jul 1, 2013 4:35pm
Quoting gspajon
{quote} If stochastic works for you then that's great. In my experience ANY indicator is only averaging past data and has no predictive value (which is the point of using it). However if you see an overbought/oversold condition on your indicator that corresponds with a fib level, I encourage you to do a probability study of the condition to see if there is any probability of price moving in the anticipated direction. I think you will find there is nothing greater than chance (50/50). I reiterate to anyone who cares to listen. No matter what "method"...

>predictive value

This, in my opinion, is a very bad way to think of things when it comes to trading. In poker, I don't bet because I'm predicting the next card will the be the ace of hearts giving me the royal flush, I'm betting because the odds that I'll win the hand are good enough concerning all the variables in poker.
Play the players, not the cards.
  • #46
  • Jul 1, 2013 4:53pm Jul 1, 2013 4:53pm
Quoting GnarlyPips
{quote} >predictive value This, in my opinion, is a very bad way to think of things when it comes to trading. In poker, I don't bet because I'm predicting the next card will the be the ace of hearts giving me the royal flush, I'm betting because the odds that I'll win the hand are good enough concerning all the variables in poker.
I don't gamble at all...so perhaps my ignorance is showing. My point is simple. Know the probabilities of your "method" or "system" and develop a rule set to take advantage of those probabilities. A pattern that produces an expected result less than 50% of the time does not have a PROBABLE positive outcome. That doesn't mean it is imPOSSIBLE, just that it is unlikely.

I would "probably" lose a great deal of money if I gambled...as I have not sense for the "variables" of any game of chance.
  • #47
  • Jul 1, 2013 5:17pm Jul 1, 2013 5:17pm
Quoting gspajon
{quote} I make my trading decisions based on the 4 hr time frame (FXDD is my broker). While I understand that the candles differ from one broker to the next, I find the 4 hr time frame is the best compromise between the slower daily and weekly charts, and the faster intraday charts. That being said I am very conscious of what is going on "underneath" the 4 hr chart as well as where price is moving on the larger time frames. I use the "triple screen" concept and keep three charts side by side to give myself a good view point on a given market....
I use 3 charts as well. Daily, hourly, 15/5min. Daily zoomed out for major swings (what i feel are major swings), Hourly to determine current trend (it's as simple as 200sma sell below buy above), and 15/5 minute for entries and a little more discretion concerning direction. All this in an effort to do exactly what you do lol (catch the current trend).

I used to be able to say the 43% of my winners trades hit the fib 50 and turned with about a 3-12 pip variation but i haven't been keeping track of that sort of stat for the last 8 months or so. I've never really noticed any significant correlation to any of the real fib numbers and winners. I dismissed fibs for my style of trading but i guess now i'll have to take a look at your parameters and see how they stack up with what i do.

One of the 5/15 sr entries is simply a pullback to a clean break of a high or low. Whats clean or not is really based on my experience and is highly discretionary. The charts a little fast but i think it's possible that something along those lines could help determine which fib to consider.
  • #48
  • Jul 1, 2013 5:26pm Jul 1, 2013 5:26pm
Quoting Good Lookin
{quote} ... I used to be able to say the 43% of my winners trades hit the fib 50 and turned with about a 3-12 pip variation but i haven't been keeping track of that sort of stat for the last 8 months or so. I've never really noticed any significant correlation to any of the real fib numbers and winners....
I've never been that "surgical" in my trading. For me that kind of precision requires me to be up most of the night as most of the entries occur in the London session. For me that means being up all night every night...I'm too old for that anymore.

I just set pending OCO orders so that I essentially lay a "trap" for price and can often get in as close as 20 pips from a swing point. That's about as precise as I can get, as it is all done while I sleep. I don't wait to see price turn, I just enter and use the probability that price does turn 70% of the time. Its now just a matter of finding how to target where, (what level).
  • #49
  • Jul 1, 2013 11:07pm Jul 1, 2013 11:07pm
gspajon, daenoracer,

this is a good discussion. glad to share thoughts and discoveries.
cryptocurrency everytime
  • #50
  • Jul 2, 2013 8:54am Jul 2, 2013 8:54am
Quoting gspajon
{quote} I've never been that "surgical" in my trading. For me that kind of precision requires me to be up most of the night as most of the entries occur in the London session. For me that means being up all night every night...I'm too old for that anymore. I just set pending OCO orders so that I essentially lay a "trap" for price and can often get in as close as 20 pips from a swing point. That's about as precise as I can get, as it is all done while I sleep. I don't wait to see price turn, I just enter and use the probability that price does...
I wouldn't quite call it surgical. But i do get your point. The setups occur often enough between the Eur, Gbp, Aud, Jpy, Chf, Cad, 5yr note, e-mini S&P-Nasdaq-Dow, crude oil, and gold (and sometimes wheat). There's usually a setup at any point during the day accross any one of those and i just have to identify it. It's really just me entering when i have the time. I like sleep just as much as you .

Prelim test are indicating to me that the 50 fib seems to be the magical one. This weekend i'll take some time to give it a thorough poking around.
  • #51
  • Edited 5:50am Jul 3, 2013 5:34am | Edited 5:50am
Quoting gspajon
Hello all...here is what will probably seem like a stupid question for many of you. Do you use Fibonacci retracements to enter? If so how do you decide WHICH level to enter at? Do you enter ALL of your risk exposure at one level, or do you scale in at certain levels? Another question...Do you use some other form of confluence such as prior support/resistance, moving averages (if so which one), or confluent fibo levels from larger or smaller time frames? Is there a particular method that YOU use that you've found helpful or accurate? Thanks in advance...
Alternative Fib levels I will Tell You One Thing.

First observe the yesterday candle's high and low price and candle opening and closing.
Second Observe the candle color I mean bull or bear candle.
Third If it Bull candle then observe the upper wick of the candle. if the upper wick is low and it seems 10% of the total candle size, then today you take the trade at 25% level of the previous days candle.(I mean just come down 25% from the Yesterday candle's High Price) and put the take profits 25% above of the yesterdays high price. Then see how the trade makes you profits. so be practical if all the time fib works then every body will get profits and involved in trading.

Example
Yesterday High Price is 1.32000
Yesterday low price is 1.31000
Opening Price is 1.31500
closing price is 1.31900
so the upper small wick is just 10 pips I mean 1.32000-1.31900 = 100 this is 10% of the total candle size of 1000 (1.32000 - 1.31000) Higher price - Lower Price Total volume 1000 points feel these 1000 points as 100%
Now you come down 25% from the high price that means 250 points so it is 1.31750 is the Buy Entry Area and the take profits are is just 25% of the yesterday's high price that means 1.32250 - that means total 50 pips Take profits (500 points)

This is the my trading method. Always I follow dynamic support and resistance levels in Day candle and Break Ups.


thank u
anilcashtips
  • #52
  • Jul 3, 2013 7:16am Jul 3, 2013 7:16am
Quoting anilcashtips
{quote} Alternative Fib levels I will Tell You One Thing. First observe the yesterday candle's high and low price and candle opening and closing. Second Observe the candle color I mean bull or bear candle. Third If it Bull candle then observe the upper wick of the candle. if the upper wick is low and it seems 10% of the total candle size, then today you take the trade at 25% level of the previous days candle....
An interesting idea, but very unusual. I can't say I've ever heard of this technique. I have some questions regarding this:

  1. Is 25% level the ONLY level in your scale?
  2. Why 25%?
  3. If the previous day's candle does NOT meet the criteria you've outlined above, does that invalidate this technique?
  4. Do you know of or have you done any studies of this technique to show the probability or likelihood of a continuation given the above criteria?
  5. Is there somewhere I can read about this for any further detail?

What you've outlined sounds like a technique that would be successful in a strongly trending market that looks for continuation, but seems very specific to that kind of market, which I estimate is less than 10% of the time. However it strikes me as a great technique for adding in (or scaling into) a winning position. I am curious to read more.

  • #53
  • Jul 3, 2013 4:27pm Jul 3, 2013 4:27pm
Quoting venzen
gspajon, daenoracer, this is a good discussion. glad to share thoughts and discoveries.

Thanks for your kind words. Can talk Elliott Wave & Fibs all day !!!
  • #54
  • Jul 3, 2013 4:34pm Jul 3, 2013 4:34pm
Quoting anilcashtips
{quote} Alternative Fib levels I will Tell You One Thing. First observe the yesterday candle's high and low price and candle opening and closing. Second Observe the candle color I mean bull or bear candle. Third If it Bull candle then observe the upper wick of the candle. if the upper wick is low and it seems 10% of the total candle size, then today you take the trade at 25% level of the previous days candle.(I mean just come down 25% from the Yesterday candle's High Price) and put the take profits 25% above of the yesterdays high price. Then see...

Interesting. Thanks for sharing your system. I do something similar with regards to daily candle information, however my approach and my levels for entry & exit are slightly different and I factor in levels for Risk.

I am curious as I did not see your Risk strategy disclosed and wonder if you could elaborate on your risk levels. If none of my biz, understood.

thx again for sharing your system.
  • #55
  • Edited 9:14pm Jul 4, 2013 8:07pm | Edited 9:14pm
Quoting gspajon
{quote} An interesting idea, but very unusual. I can't say I've ever heard of this technique. I have some questions regarding this: Is 25% level the ONLY level in your scale? Why 25%? If the previous day's candle does NOT meet the criteria you've outlined above, does that invalidate this technique? Do you know of or have you done any studies of this technique to show the probability or likelihood of a continuation given the above criteria? Is there somewhere I can read about this for any further detail? What you've outlined sounds like a technique...
Definitely an interesting idea and a logic one (strong/weak close = continuation). Testing I've done long ago, showed that chance of previous daily high being re-tested is significantly higher when close is above pivot (or median). The opposite is true for low re-test. For EURUSD the probability is about 70%, and this happens virtually in any pair to a higher or lesser degree. The thing is I've never found this info alone to be diagnostic of future direction. Then again, I've never done any study controlling variables in the exact same way described by anilcash. So, it's possible his idea has merit.

edit: added NOT in caps

edit the edit
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #56
  • Jul 4, 2013 9:08pm Jul 4, 2013 9:08pm
Which Fibo level do YOU use and why?

Which Fibo level do YOU use ==38.2

and why? ==because of the oncoming impulse is still strong
Attached Image
if there is something you should keep secret,simply just save it,, so, just
  • #57
  • Jul 4, 2013 9:21pm Jul 4, 2013 9:21pm
if passed 38.2,usually have less powerful thrust
Attached Image
if there is something you should keep secret,simply just save it,, so, just
  • #58
  • Jul 4, 2013 9:25pm Jul 4, 2013 9:25pm
Quoting sandycarrot
Which Fibo level do YOU use and why? Which Fibo level do YOU use ==38.2 and why? ==because of the oncoming impulse is still strong {image}
In theory 38.2% retrace is typical of impulsive waves/trending, meaning big rewards should be more likely. However, this promise of big reward comes at how much risk? Where to put the stop exactly? That's why I like the the way gspajon has thought this out. The R:R is planned beforehand. His risk is perfectly measured before taking any trade.
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #59
  • Jul 4, 2013 10:13pm Jul 4, 2013 10:13pm
Quoting gspajon
Hello all...here is what will probably seem like a stupid question for many of you. Do you use Fibonacci retracements to enter? If so how do you decide WHICH level to enter at? Do you enter ALL of your risk exposure at one level, or do you scale in at certain levels? Another question...Do you use some other form of confluence such as prior support/resistance, moving averages (if so which one), or confluent fibo levels from larger or smaller time frames? Is there a particular method that YOU use that you've found helpful or accurate? Thanks in advance...

What is BayView trading?

I think what most people miss when talking about "fibs" is that the numbers lead to Phi.
***The real discussion should be about the golden ratio.
When you put the stock MT4 GR tool on your chart it makes no sense, in-fact the way most traders use it is completely useless and random.

Notice that tool I work with is nothing but the GR over and over....if the yellow lines represented a price move.....which tool makes more sense?

Im not sure you are going about this in the right way....if you are looking to trade with the GR then I think you should rethink what the tool does.
The fact that Phi is never ending also lets the ratio fit anything on your chart......meaning that it will hit a GR line 100% of the time...not some random number.
Attached Image (click to enlarge)
Click to Enlarge Name: goldenratio.png Size: 35 KB
  • #60
  • Jul 4, 2013 11:12pm Jul 4, 2013 11:12pm
Hi, I am not trying to be condescending or pretend that I am a superior trader but I believe the right question should be " what value fib should be used for what currency pairs".
The very basic of forex is One must first know what object is to be measured or quantified then will he knows whether he has to use a ruler and its sizes or a measuring tape and its sizes to track and follow its flows and dynamics.
I will attempt to elaborate more until the next visit i see that this basic is understood first in this thread.

Meanwhile good luck and happy learning....

GS
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