fibo experts — which fibo ?

[TSOKAKIS]

...
...

of course.... i could be TOTALLY WRONG

i think Robert Miner's book on Fib/Elliott is good.
..... he says the market shows strong Fib/Elliott patterns about 50% of the time.

This is the weak point. The Fib patterns statistics is much lower than this 50%. And, as you probably agree, when the 0.618 verification is below 6% for the last 10 years, then you will loose real money in the market. This is simply prooved [you may see the reference some messages ago] and there is no room for anything to say on this. The 50% exists only in the imagination of the author.

 

[TSOKAKIS]

Quote from TSOKAKIS:

...
...

of course.... i could be TOTALLY WRONG

i think Robert Miner's book on Fib/Elliott is good.
..... he says the market shows strong Fib/Elliott patterns about 50% of the time.

This is the weak point. The Fib patterns statistics is much lower than this 50%. And, as you probably agree, when the 0.618 verification is below 6% for the last 10 years, then you will loose real money in the market. This is simply prooved [you may see the reference some messages ago] and there is no room for anything to say on this. The 50% exists only in the imagination of the author.

I will be more specific.
Let us suppose a zig percentage 5%.
Let us examine the 0.618 ratio and give a wide tolerance of 5% plus or minus. It means that ANY ratio between 0.588 and 0.648 will be considered as a TRUE 0.618.

Since Jan 1997 we have for ^NDX 170 retracements and only 5 are in the above range. The statistics is 3%.
For ^DJI the respective confirmation of the 0.618 ratio was 1%, for ^GSPC 3%, for the Japanese ^N225 was 4% and so on.
Dont you think it is a bit far from the 50% ?

 

[traderdave72]

Quote from rcanfiel:
There are countless studies available. Hit the large libraries and start digging through the current and historical stacks, under financial periodicals, and serious financial works. Spend less time arguing for useless things, and more time seeing what does/does not work. At least, if you want to make money


I really don't need to waste my time searching for these articles, I do just fine using fibs. You still haven't provided us with actual proof to what you claim!

 

[Wallace]

a reminder

this is not a thread about whether or not fibos work


the questions are for those who DO use fibos

Q: which fibo is correct # 1 or # 2 ?
— how do you draw fibos ?
Q: do you use specific fibo levels or, any fibo line for Price targeting ?
— how do you make use of the levels ?
Q: what determines your fibo methodology ?
— how and why are you using fibos the way you do ?

 

[TSOKAKIS]

Quote from Wallace:

a reminder

this is not a thread about whether or not fibos work


the questions are for those who DO use fibos

Q: which fibo is correct # 1 or # 2 ?
— how do you draw fibos ?
Q: do you use specific fibo levels or, any fibo line for Price targeting ?
— how do you make use of the levels ?
Q: what determines your fibo methodology ?
— how and why are you using fibos the way you do ?

The answer to your questions is obvious.
# No fibo is correct, because both #1 or #2 statistics are very poor
# There is no reason to search among various fibo levels, even the best of them is below 5% in successful prognosis
# The best way to use fibo is to forget all about it. This theory has nothing to do with successful trading.
The proofs are posted some messages ago.
I hope it is clear.

 

[TSOKAKIS]

Quote from Wallace:

a reminder

this is not a thread about whether or not fibos work


the questions are for those who DO use fibos

Q: which fibo is correct # 1 or # 2 ?
— how do you draw fibos ?
Q: do you use specific fibo levels or, any fibo line for Price targeting ?
— how do you make use of the levels ?
Q: what determines your fibo methodology ?
— how and why are you using fibos the way you do ?

Since it is only a logical trick, this is another set of answers

# Both fibos are correct to draw, they will equally give no result for real trading conditions
# You may use any fibo level, they will equally have very low statistical confirmation

As far as I remember from the college years, when a question has positive and negative answer with the same meaning, then the question should be revised somehow.

I hope it is more clear now.

 

[traderdave72]

Quote from Wallace:

a reminder

this is not a thread about whether or not fibos work


the questions are for those who DO use fibos

Q: which fibo is correct # 1 or # 2 ?
— how do you draw fibos ?
Q: do you use specific fibo levels or, any fibo line for Price targeting ?
— how do you make use of the levels ?
Q: what determines your fibo methodology ?
— how and why are you using fibos the way you do ?

A: There is no "right or wrong way" if your methodology is profitable, then stick iwth the way YOU are using them.
A: Yes, I use specific Fib levels, I make use of them by utilizing the retracements and extensions of different waves.
A:What determines my methodology is am initial impulse move, which I Call X to A, once that move has been established I can go through my progressions to figure out where I will enter and exit. I know WELL in advance, where my entrance it going to be, and where my profit targets are going to be. I have attached a file that hopefully will help you to understand.
My methodology has at least a 1:3 Risk to Reward ratio, therefore I can be wrong a lot more that I can be right, and still make good money. It's all about following your PLAN, (and I am assuming you have one,) a trader without one is like a fish out of water, DEAD. All I have to say about this thread is, that there are a lot of closed-minded people, I am sure that contributes to the 5% SUCCESS rate in trading. You have to be open-minded or you will not be able to successfully create a winning method. The first drawdown you hit, you will throw the system away and yet go on another journey for the Holy Grail. My 2 cents.

In the chart below, my entrance was at the D completion. My reason for entering, ration confluence at the 1.272/.786 fib levels and also you could have entered at the 1.618/.886 and not taken any heat, but, AB=CD into the 1.272/.786, so that is why I entered, I would rather risk a few more pips, than miss the move all together. This is what I have found out about myself, it fits my personality so to speak.
There will still be some people that look at this chart and think "LUCK" well before you say that, please take the time to backtest and then post your results.

 

[gnome]

While I don't look for Fib extensions, Fib retracements work often enough to be "another setup to play".

Here's one from this week's dip.

 

[rcanfiel]

Quote from traderdave72:

Quote from rcanfiel:
There are countless studies available. Hit the large libraries and start digging through the current and historical stacks, under financial periodicals, and serious financial works. Spend less time arguing for useless things, and more time seeing what does/does not work. At least, if you want to make money


I really don't need to waste my time searching for these articles, I do just fine using fibs. You still haven't provided us with actual proof to what you claim!

No one does fine with Fib levels. And even if presented with proof, the believers will hem and haw. More stupid responses are likely to follow.

This is one example study, by Cass Business School in London. that looked at the market from 1914 to 2002 at Fib levels (they also studied round numbers). That is 86 years of market performance. This is only one study among others:

http://www.cass.city.ac.uk/media/stories/resources/Magic_Numbers_in_the_Dow.pdf

Their conclusion:

"Our conclusion must be that there is no significant difference between the frequencies with which price and time ratios occur in cycles in the Dow Jones Industrial Average, and frequencies which we would expect to occur at random in such a time series. In our introduction, we noted that empirical evidence from academic studies suggests that not all of technical analysis can be dismissed prima facie. The evidence from this paper suggests that the idea that round fractions and Fibonacci ratios occur in the Dow can be dismissed." [/B][/QUOTE]

I will cross post this in the other fib discussions going on.

 

[traderdave72]

Quote from rcanfiel:

No one does fine with Fib levels. And even if presented with proof, the believers will hem and haw. More stupid responses are likely to follow.

This is one example study, by Cass Business School in London. that looked at the market from 1914 to 2002 at Fib levels (they also studied round numbers). That is 86 years of market performance. This is only one study among others:

http://www.cass.city.ac.uk/media/stories/resources/Magic_Numbers_in_the_Dow.pdf

Their conclusion:

"Our conclusion must be that there is no significant difference between the frequencies with which price and time ratios occur in cycles in the Dow Jones Industrial Average, and frequencies which we would expect to occur at random in such a time series. In our introduction, we noted that empirical evidence from academic studies suggests that not all of technical analysis can be dismissed prima facie. The evidence from this paper suggests that the idea that round fractions and Fibonacci ratios occur in the Dow can be dismissed."

I will cross post this in the other fib discussions going on. [/B][/QUOTE]'


Well, thanks for finally providing some proof, but, I make money using them, it works for me, and I know of others who use them profitably. Enough people believe that they work so they have become a self-fufililng prophecy I guess, but hey, if we can profit from them, that's all that matters. Good luck on your journey to prove that Fibs don't work. Maybe you can take the opposite side of the "fib level trades", if they don't work, you should make millions.