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Are Fibonacci levels overrated?

  • #41
  • Apr 3, 2007 10:48am Apr 3, 2007 10:48am
Yes it does. But those are support levels once there is a decline.
  • #42
  • Apr 3, 2007 11:40am Apr 3, 2007 11:40am
From my limited experience any indicator (pivots, trend lines etc) that have you focused on some levels are useful. I like to watch good old Support/Resistance levels...
  • #43
  • Apr 4, 2007 2:34am Apr 4, 2007 2:34am
  •  dado26
  • | Joined Mar 2007 | Status: Plan your trade and trade your plan | 180 Posts
Hi!
We get Fibonacci nubers from GOLDEN RATIO 1.618 and 0.618. This is number used in arhitecture, painting even our body is. This number is natural in our world so why shouldn t it be used in forex. Basicly it has greater power cause a lot of people are using Fibos. I use them mainly for exit points or for forcasting where is market likely to reverse.

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PLAN YOUR TRADE AND TRADE YOUR PLAN......
  • #44
  • Edited 7:36pm Aug 16, 2007 5:46pm | Edited 7:36pm
Quoting tdion
Oh and I firmly believe the banks are not trading to make profits.... they are buying Forex future contracts to hedge their country's economies based on fundamentals.... they are exercising the contracts and not selling them for profit. That's why price action is my bread and butter for now.
I have changed my opinion, after a lot of FF reading.

I still think it's rather comical how much speculation goes on w/ Fibs. People are speculating on all timeframes, and most of their highs and lows don't match on the same timeframe.

Step back a minute, people, and look around. I think Fibs are junk science. If I ruffled your feathers, good.
  • #45
  • Aug 16, 2007 5:52pm Aug 16, 2007 5:52pm
I'm the Fib man

Fib is not overrated, you just have to know how to use it properly
Trade what you see, not what you think.
  • #46
  • Aug 16, 2007 5:58pm Aug 16, 2007 5:58pm
Quoting tdion
I was first introduced to Fibonacci levels when I read a trading system by Quantum Global. Basically, if there is a "wave" greater than 40 pips in height, you were supposed to play the Fib levels, and filter your trades based on RSI.

I backtested the method for a year or two, and found that it won 50% of the time.

I could flip a coin and have the same results... 50/50.

I realize many traders swear by Fibs.... and yes you can find Fib "patterns" in charts a lot. But how valid are Fibs really? My problem is that I believe too many traders are playing Fibs in different timeframes... consequently a lot of noise in the charts.

Oh and I firmly believe the banks are not trading to make profits.... they are buying Forex future contracts to hedge their country's economies based on fundamentals.... they are exercising the contracts and not selling them for profit. That's why price action is my bread and butter for now.
Almost every one uses Fibs in my opinion wrong. If you really want to undertand the power and use of fib numbers, read DiNapoli's book
The Practical Application of Fibonacci Analysis.

I always thought I was using them correctly, because that is the way all software packages teach, but there is so much more to and Where to place them is not subjective, like I assumed it was.

My eyes were opened by that book.

Just this morning, the Dow futures followed a weekly confluence of a series and bounced at the exact range of that fib confluence... Dopey will know what I mean here, right away...

regards
  • #47
  • Aug 17, 2007 4:47am Aug 17, 2007 4:47am
Quoting smjones
Almost every one uses Fibs in my opinion wrong. If you really want to undertand the power and use of fib numbers, read DiNapoli's book
The Practical Application of Fibonacci Analysis.

I always thought I was using them correctly, because that is the way all software packages teach, but there is so much more to and Where to place them is not subjective, like I assumed it was.

My eyes were opened by that book.

Just this morning, the Dow futures followed a weekly confluence of a series and bounced at the exact range of that fib confluence... Dopey will know what I mean here, right away...

regards
Scott,

I totally agree that most folks learn just the basics of Fibs then are surprised to learn that they're no better than anything else.

DiNapoli's approach is the most comprehensive I've seen. My best friend took a seminar with him in Bangkok a few years ago (the same guy who did the seminar with MTI many moons ago). DiNapoli is legit, the real thing. Like most successful traders, he keeps it simple and knows his tools inside and out. That can't be said for most traders.

Right now Cable is at a weekly confluence. It'll be interesting to see if it holds.
  • #48
  • Aug 17, 2007 5:47am Aug 17, 2007 5:47am
Dopey, thanks for the heads up. I see what you mean
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  • #49
  • Aug 18, 2007 4:56am Aug 18, 2007 4:56am
TDION - SO what do you think of those FIB's now? Heh, heh. Brilliant luck. LOL...

By the way, I totally agree with the traders above who referenced DiNapoli as an excellent source of information regarding Fib's. He's written some really good stuff on the subject.

Good Trading to ya...
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  • #50
  • Aug 18, 2007 11:06am Aug 18, 2007 11:06am
I am more partial to the way Robert Miner/Dynamic Trader uses fibs. Price and Time fib projections along with the pattern are used to determine market direction.

Is it infallible, of course not. What is? But traders will faithfully follow their favorite MA crossover/Overbought-Oversold indicator/etc thinking that is the way. Good for them. I'll stick with fibs.
  • #51
  • Aug 18, 2007 11:34am Aug 18, 2007 11:34am
Quoting SunTrader
I am more partial to the way Robert Miner/Dynamic Trader uses fibs. Price and Time fib projections along with the pattern are used to determine market direction.

Is it infallible, of course not. What is? But traders will faithfully follow their favorite MA crossover/Overbought-Oversold indicator/etc thinking that is the way. Good for them. I'll stick with fibs.
Trade what you see, not what you think.
  • #52
  • Aug 20, 2007 10:36am Aug 20, 2007 10:36am
Fibs are a great source for exiting and entering trades. But if a person doubts fibs one thing is for sure currencies go up then go down. There are definetly hourly, daily, and weekly patterns that a currency have. See the below link and post 542 for 8 years of gbpusd weekly retracements.

http://www.forexfactory.com/showthre...=27624&page=37
  • #53
  • Sep 4, 2007 11:56am Sep 4, 2007 11:56am
I'm on a hunt today for some fibonacci info and I haven't seen it yet. But I across this here thread and I thought I'd chime in.

I agree with smjones in that I think most people plot fibs wrong. While any range can reveal harmonic proportion, I think there is more to it.

To avoid cross posting all over the place, I posted some thoughts here:http://www.forexfactory.com/showthre...38#post1575538

I'll also add this thought... the Fibonacci sequence and ratios thereof are more than just 1 dimensional ratios resulting in price retracements and extensions. The growth spiral is 4 dimensional in nature at least. The 3 dimensions of length, width, depth, and a 4th dimension of time. You can even add one more dimension of motion. Someday someone will figure out the fibonacci application of all 10 dimensions that science has revealed. 9 spacial plus 1 for time. 9 spacial.. crazy. There are 4 more dimensions us humans can not perceive with our eyes. So no wonder fibonacci can seem over rated on a two dimensional representation of a multi dimensional phenomenon.

To bring things back to somewhere practical and applicable to trading, the two dimensions of the trading chart can reveal the fibonnaci growth spirals if starting from the right place in both price and time. Where fibs of price and time square up are definite changes in trend. Gann talks about squaring price and time in terms of degrees. But fibs are as harmonic as anything and they too square up. I believe Gann did use fibs or something close to them. For as verse as he was in number, geometry, and universal proportion, he couldn't have NOT at least been heavily influenced by them.
  • #54
  • Sep 4, 2007 1:08pm Sep 4, 2007 1:08pm
much like other technical analysis tools, fibo exists because people want to see it there. fibo runs in nature, because we want to see it there. we are naturally inclined to want some pattern in chaos. its largely psychological imo.
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  • #55
  • Sep 4, 2007 2:25pm Sep 4, 2007 2:25pm
Like any other type of Technical Analysis tool, fibs are not to be traded alone by themselves. You combine them with other elements of T.A.

But, as one of those S/R tools, they do work.
  • #56
  • Mar 29, 2017 8:59pm Mar 29, 2017 8:59pm
the fact that a large number of traders do actually believe in fibs make them a self-fulfilling prophecy. That in large part is how a lot of popular indicators work, just by massaging crowd behaviour.
The argument then becomes whether it is possible for traders to agree on the usage of something even as simple as this, and in what sort of conditions. If they can't, then fibs cannot be self-fulfilling because there is room for disagreement.
Truth is, nobody really needs fibs if they know how to read price action sensibly. I used to use them religiously, then discovered that I was kidding myself - 61.8 and 32.. simply correspond to "most of the way back" and "some retracement" respectively.
  • #57
  • May 2, 2017 11:35pm May 2, 2017 11:35pm
Well, you can’t rely on only Fibo! If you have good knowledge on technical and fundamental analysis, then you can filter your entry points by using this popular tool! The popular levels of fibo are too much powerful, they work as support and resistant levels, so you can set your TP and SL according to important levels of Fibo, but again only fibo is not enough here!
  • #58
  • May 3, 2017 12:33am May 3, 2017 12:33am
I used them for years, all types of retracement levels really...but not so much anymore, got bored with them. Got tired of drawing them. I'm pretty sure they work, or pretty sure I know people that make them work. They worked for me, quarters really, but they tend to produce a lot of trades. Anyway, now I just eyeball my chart, draw a few random horizontal levels, and take my chances....
Look Sharp/Trade Tight
  • #59
  • May 18, 2017 9:36am May 18, 2017 9:36am
Yes, I use Fibo in my trading, but I don’t rely on only this technical tool! Till now my news trading knowledge is my main strength! I actually use Fibo tool for determining market trend technically! In addition, I work on full market scenario rather than any particular trading tool! This is way, now my success ratio is more than 70%.
  • #60
  • May 18, 2017 10:24am May 18, 2017 10:24am
here u go fib fans might help a few of you ..
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