Depending on your diet, if you look hard enough, you'll see fibbonacci ratios somewhere inside the brown fish in the toilet.
Where is the logic behind applying Fibonacci to trading?
- #85
- Feb 5, 2016 3:21pm Feb 5, 2016 3:21pm
- Joined Mar 2011 | Status: Bullish Behavior | 3,182 Posts
{quote} No, if you look hard enough, you'll see them when you plot them. When the price reaches these levels, it usually reacts ''you then wait for confirmation as to whether the reaction is a change of direction or not. having said that, nothing works in isolation, you have to have other reasons behind expecting the price to react in a certain way off of a fib level, not just the fib.
- #87
- Feb 5, 2016 4:29pm Feb 5, 2016 4:29pm
- Joined Dec 2012 | Status: On Life's Path | 2,076 Posts
Depending on your diet, if you look hard enough, you'll see fibbonacci ratios somewhere inside the brown fish in the toilet.
- #88
- Feb 5, 2016 4:36pm Feb 5, 2016 4:36pm
- Joined Mar 2011 | Status: Bullish Behavior | 3,182 Posts
{quote}
- #91
- Edited 6:29pm Feb 5, 2016 6:19pm | Edited 6:29pm
- Joined Sep 2006 | Status: ... | 8,113 Posts
I've never stated I agree 100% with his assertions. As you pointed out in your rebuttal his generation of random charts is I'll conceived. But I do think his assertion that just drawing a line on a chart is meaningless.What he illustrates well is the subjective nature of the lines and that if you draw enough of them, it appears as if they have meaning which isn't there.
All lines drawn -- and indeed all analysis -- is ultimately subjective.
I stand by my point that FX charts' occasionally respecting randomly plotted lines and averages is NOT in itself proof of their failure to respect 'conventionally' plotted lines. (Let alone a proof that FX is a completely random walk). Whether 'conventionally' plotted lines (round numbers, trendlines, fibo levels, pivot levels, prior daily highs/lows, 200 EMA, prior buying/selling zones, ........ whatever) can be used to pick reversal areas ultimately depends on whether high enough volumes of limit orders get placed at/near those levels to create some kind of self-fulfilling prophecy. Investigating the merits of randomly plotted lines is irrelevant to this question, hence the logical fallacy in the video presenter's argument.
Ooopps .. whong ...... yupp tub .....
zis piccy zaken far bvor .... npf ... ppkf ... mmkf ... ttkf ....
zus 3 pair lookin under the radarz ...
onaaz ... pizzce .....no photo soup ........................................
not affilited wiz pinochionachiii nor arzhimedeses .......
nottin to sell .... nor taken ......
entoy ......
zis piccy zaken far bvor .... npf ... ppkf ... mmkf ... ttkf ....
zus 3 pair lookin under the radarz ...
onaaz ... pizzce .....no photo soup ........................................
not affilited wiz pinochionachiii nor arzhimedeses .......
nottin to sell .... nor taken ......
entoy ......
- #97
- Feb 5, 2016 8:25pm Feb 5, 2016 8:25pm
- Joined Jan 2011 | Status: Senior Trader | 1,475 Posts
Bulls are stupid Animals!especially when Im short!
- #98
- Feb 5, 2016 8:29pm Feb 5, 2016 8:29pm
{quote} And I never stated that you stated........
Because each price feed is slightly different, and each trader will ultimately draw his/her fibo lines differently means that the self fulfilling prophecy becomes a less likely scenario. And that would assume that a bank trader actually uses fibo lines at all, which they don't. I'm not going to argue that point. It is a fact.
I think the biggest misunderstanding here is that the real market is mostly speculation. Market making drives the price, and they really don't have time to worry about the traditional nonsense retail traders obsess over.
Anyway...as was stated earlier...this argument has been done and done again...and in a few months we'll see another line of the same content.
The reason this keeps popping up is because (as with everything) there is no solid answer. For each disciple of fibo, there is another detractor.
For my part I don't care who uses what.
But the idea that fibo, or anything else for that matter, is an accurate predictor of where the price will go is laughable.
If it were as the users claim; that fibo predicts chart movements as accurately as 70% of the time, then there would be no need for discussion.
Fibo is just another confirmation tool which has no more or less value than anything else.
Once again, as someone stated earlier there is a simple way to test this over time.
Not with hindsight cherry picked examples either. Let's see prediction.
I invite anyone to start a new thread. On that thread, choose 3 pairs as a maximum. On each pair choose 1 time frame. In real time, plot the fibo lines with the current price, and then call the next price.
Simple.
If over a significant number of examples, the accuracy of prediction (not retrospective adjustment) is 70% or over, i will admit I'm wrong.
The reason for the 1 timeframe rule being; fibo users are quick to modify expectations by flicking through timeframes..."oh, the H1 "x" didn't make the next level because the H4 rejected "y." It's a cop out.
Choose one timeframe per pair, and then get to work with predictive calls.
If the person was so inclined, a simple demo TE backing up their predictions with trades would help emphasize the point of their usefulness too.
Wealth comes from what you keep, not what you earn
- #100
- Feb 5, 2016 8:49pm Feb 5, 2016 8:49pm
- Joined Sep 2013 | Status: Trader | 1,209 Posts
{quote} Because each price feed is slightly different, and each trader will ultimately draw his/her fibo lines differently means that the self fulfilling prophecy becomes a less likely scenario. And that would assume that a bank trader actually uses fibo lines at all, which they don't. I'm not going to argue that point. It is a fact. I think the biggest misunderstanding here is that the real market is mostly speculation. Market making drives the price, and they really don't have time to worry about the traditional nonsense retail traders obsess...
Anyone ?