There is only one fib ratio that will offer you any sort of statistical edge. The others will work some of the time but not 70%+. You will see people posting charts look how it worked this time and proceed to feed money to the markets only to fail over and over. The issue is whether it happens often enough to give you an edge and minimizing your risk when it doesnt work.
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fibo experts â which fibo ?
- Thread starter Wallace
- Start date
Quote from apex82:
There is only one fib ratio that will offer you any sort of statistical edge. The others will work some of the time but not 70%+. You will see people posting charts look how it worked this time and proceed to feed money to the markets only to fail over and over. The issue is whether it happens often enough to give you an edge and minimizing your risk when it doesnt work.
In my opinion, there is no fib ratio to offer more than 10% successful statistics over a timeframe of, say, 10 years.
Since the codes are available, it is not hard to proove what I say.
Quote from TSOKAKIS:
In my opinion, there is no fib ratio to offer more than 10% successful statistics over a timeframe of, say, 10 years.
I'm a bit surprised. You're a smart guy (mathematician, right?), you're just not seeing* it.
Use of Fibs is kind of like TA. You know there's lots of buzz these days about how "TA doesn't work any more". Well, some parts of it work SUPER well, and others not**. Fibs aren't in the class of "best TA work", but some of them (under certain conditions.. WHICH OCCUR FAIRLY OFTEN) work well enough that they should be in every trader's tool box.
*maybe it's the chemist in me... they tried to train me to be observant.
** years ago there was a service (which I subscribed to) that tracked about 135 technical indicators every day... I didn't even know there were that many... The premise was that at times certain ones correlated well with the market and at other times different ones did. As you can imagine, the entire process was ineffective. By the time you figured out it was time to change "bag of indicators" to use, the move was either lonnnng gone or over.
Quote from gnome:
I'm a bit surprised. You're a smart guy (mathematician, right?), you're just not seeing* it.
Use of Fibs is kind of like TA. You know there's lots of buzz these days about how "TA doesn't work any more". Well, some parts of it work SUPER well, and others not**. Fibs aren't in the class of "best TA work", but some of them (under certain conditions.. WHICH OCCUR FAIRLY OFTEN) work well enough that they should be in every trader's tool box.
*maybe it's the chemist in me... they tried to train me to be observant.
I would not bet against Tsokakis seeing it or not.IMHO,that would be a very foolish decision,and there are a host of people who would jump all over it.
Trading Fibs is no more than trading retracements or price targets.Those who use them and succeed are good traders,probably employing a very sound MM scheme.The very same could be said for candlestick patterens.I doubt will you find a statistical backtest that shows any edge in trading candlestick patterns in isolation.Yet there are very successful traders employng them exclusively.
The list goes on and on...you will always find outliers in any approach,but does that mean the approach is statistically valid,or the trader using them has a unique ability??
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
If you saw a hot blonde would you walk up to her and say you have beautiful brown hair?
There is no correct answer to your question and as ALL trading tools they must be used in the context of the specific trade.
Quote from Wallace:
traderdave72, thanks for your post and explaning something of your methodology
I've a copy of one of Larry Pesavento's charts in a pdf I'm doing, are you familiar with
his methods and are your methodologies similar ?
also do you project Price levels or use fibos for Correction levels ?
must say your chart has given me a greater appreciation of triangles
Wallace,
You are correct in your assumption. I trade the Gartley patterns and have come up with a methodology that works for me. I use fibonacci retracements and extensions. The great thing about these is you know you entry and exits well before the pattern actually completes. I don't know what all this fuss about fibs is, obviously we have some very close-minded individuals posting and in my experience, traders who are NOT the slightest bit open-minded are in the class of the 95% that fail at trading. I have posted my response and I am done. I know they work when applied correctly but there are always people who love to be critics and bash anything, especially if they have tried and failed. Send me a PM if you want to know more about how I utilize these patterns.
P.S I didn't learn from Pesavento himself although I see now he does do mentoring. I learned from another well know mentor. Take care and thanks for the reply.
Quote from Wallace:
apex82, how about explaining your method of applying the fib ratio, and
telling us what is the "one fib ratio that will offer you any sort of statistical edge."
Exactly as others posted... its when to use it. There is no foolproof 100% methodology that you can trade blindly. For me, the execution is with synergy... When you have 5 or more things lining up that provide a small edge each on their own you know you there is a greater probabilty for that trade to suceed. I believe that is the best edge I am ever going to get and that is how I trade. I am not going to disclose the strongest fib level because I put in a lot of blood, sweat and tears to find it. It's pretty obvious if you have seen some of my posts.
Quote from taowave:
I would not bet against Tsokakis seeing it or not.IMHO,that would be a very foolish decision,and there are a host of people who would jump all over it.
Trading Fibs is no more than trading retracements or price targets.Those who use them and succeed are good traders,probably employing a very sound MM scheme.The very same could be said for candlestick patterens.I doubt will you find a statistical backtest that shows any edge in trading candlestick patterns in isolation.Yet there are very successful traders employng them exclusively.
The list goes on and on...you will always find outliers in any approach,but does that mean the approach is statistically valid,or the trader using them has a unique ability??
This is a step to better T/A understanding.
Since I always prefer the real examples, here is one.
In ^NDX charts, from Jan 1997 till now and for a retracement zig ratio 5% there were 177 retracements. ONLY THREE [3] of them were equal to 0.618
16/10/2001 0.61
13/7/2001 0.61 and
6/5/1999 0.62.
If a systematic fib trader bets on 0.618 all the time, then the damage is obvious, 3 successful in 177 total is too bad.
I clearly understand that some smart traders may have a profitable action on 13/7/2001 by combining more T/A elements and not only the magic fib ratio.
I suppose it is more clear now.
Quote from gnome:
I'm a bit surprised. You're a smart guy (mathematician, right?), you're just not seeing* it.
Use of Fibs is kind of like TA. You know there's lots of buzz these days about how "TA doesn't work any more". Well, some parts of it work SUPER well, and others not**. Fibs aren't in the class of "best TA work", but some of them (under certain conditions.. WHICH OCCUR FAIRLY OFTEN) work well enough that they should be in every trader's tool box.
*maybe it's the chemist in me... they tried to train me to be observant.
** years ago there was a service (which I subscribed to) that tracked about 135 technical indicators every day... I didn't even know there were that many... The premise was that at times certain ones correlated well with the market and at other times different ones did. As you can imagine, the entire process was ineffective. By the time you figured out it was time to change "bag of indicators" to use, the move was either lonnnng gone or over.
Thank you for your kind words.
I think we speak for the same thing and we use the same language.
I will agree with your /under certain conditions/ but let me wonder for this /FAIRLY OFTEN/.
If you ever have the time to write these conditions [in words], I will write the T/A code and check the statistics for you.