Fibonacci - How does it work - Does it really work?
- Thread starter nlslax
- Start date
Fib
Golden ratio/propotion
Phi=1.618
This is very solid number from any size of scale.
1.618-1=0.618
1/1.618=0.618
1/0.618=1.618
1-0.618/1.618 =0.618
1-0.618*0.618=0.618
and so on so on.
Someone says Fib has multi-level/numbers.
Actually, this is not true.
As I have shown, there is the only number.
0.382 appears another nubmer or level, but in fact, this is merely same ratio of another scale.
0.382=0.618*0.618
or
0.382=1-0.618
etc.
Golden ratio/propotion
Phi=1.618
This is very solid number from any size of scale.
1.618-1=0.618
1/1.618=0.618
1/0.618=1.618
1-0.618/1.618 =0.618
1-0.618*0.618=0.618
and so on so on.
Someone says Fib has multi-level/numbers.
Actually, this is not true.
As I have shown, there is the only number.
0.382 appears another nubmer or level, but in fact, this is merely same ratio of another scale.
0.382=0.618*0.618
or
0.382=1-0.618
etc.
The Fib sequence is given by the generic formula
fib=(2/(sqrt(5)+1))^n
n=integer
For n=-5 to n=5 we have, for example,
11.090
6.854
4.236
2.618
1.618
1.000
0.618
0.382
0.236
0.146
This sequence will form a multi-level system, when multiplied by the last High [respectively the last Low]
The fundamental term [for n=1] is 2/(sqrt(5)+1) = 0.618
Well, I know that.
I refered it already using wikipedia link.
I just have shown how 1.618 behaves for instance.
The recent DELL trend gives a quite clear example:
The yellow lines are the recent Support [28.69] and Resistance [33.26].
After the Dec14 peak the downtrend began and the Fib traders were searching for the reaction level.
The 0.500 level [red line, point A] was the wrong one, traders who went long at A lost some money since the reaction was false.
The 0.618 and the 0.786 levels were also tricky.
The main reaction came later, at point B, when the whole trend was neutralized [Fib level = 1].
Just imagine the trader who lost money in all 3 levels 0.500, 0.618 and 0.786 and could not afford a new entry at B !!
I think it is quite clear, a multi-level system may cause a lot of troubles.
AAPL example is worse.
Not any of the 0.382, 0.500, 0.618, 0.786, 1.000 levels was enough to give a valid reaction.
The stock is moving now to the 1.618 level, but, if we want to be serious, even the most fanatic Fib trader would give up, any Fib scenario is catastrophic.
Far from attractive theories for the universal harmony etc, real trading is a tough game and it should be handled with care.
The self f.prophecy is often a reality. Nevertheless, FIbonacci numbers can be useful. We will show what is our report for Dow Jones future front for today,based on Fibo numbers (and other things). If something is not clear, please ask.
Hours are in Central European Time, that is 6 hours earlier than New York times. This can be the starting for a discussione in Fibonacci numbers...
Ragards
Seleukos Automation Expert System Report 2006/02/09 07:59
FFDJ (10873.00) - Dow Jones future Front
In our elaborations over medium term trend, this instrument is now BEARISH: the investor could have bought some time ago a related put or just sold the instrument itself.
If today the instrument should point above 10893.25, it could be convenient to close the opened operation if you are in a good profit.
However the true new trend should begin if our instrument should move above 10904.15. In this case, it could be convenient to buy the underlying instrument or a related call.
For statistical information purpose only and avoiding every relation for the future, from 02/01/2002 if someone had suited exactly the methodology, it could have obtained approximatively a yearly result of category 2(not bad): that is XX.XXXX%: this is not a good reason to think that this will repeat on the future.
Operations opened on observance of medium term instruments (see Tides on Seleukos site), should be managed for coherence observing the same medium term calculations avoiding to confuse them with short term suggestions: because we are speaking about two methods completely different, confusing the systems of one type with systems of the other type may generate some contradiction.
[Tides analysis 2006020907561]
Observing last 400 working days, this instrument has today the 0.5000% of probability to close over the yesterday's close (or at the same level).By obvious consequence, it has 99.5000% of probability to close below yesterday's close.
[HotDogs and FPA analyses /]
REAL TIME TRADING ANALYSIS: ALL COMPUTATIONS ARE TO BE USED TODAY ONLY.
You should pay attention today at the under exposed prices: they could be ATTRACTORS for the underlying instrument and, if the exposed prices will be crossed quickly, we have a lot of probability that the instrument will return on such suddenly crossed price and move around it.
Attractors which can unveil a possible new bull market (you can perhaps close a part of your existing bearish positions):
11062.98 - 11037.02 - 11020.96
Attractors which may suggest that we are near the end of the bearish phase(pay great attention):
10952.98 - 10927.02
Attractors revealing a sideway day, but the existing bearish trend is still alive (the ones with asterisks have more probabilities to be touched):
10885.00 - **10842.98** - 10830.00 - **10817.02** - 10775.00
Attractors which could suggest a confirmation for the current bearishness:
10732.98 - 10707.02
Attractors which could claim a more strength for the living bearish trend(you could reinforce existing positions):
10639.04 - 10622.98 - 10597.02
The system would suggest, in theory, to open positions only when instrument is going to clearly quit an attractor and only after prices had 'parked' near the attractor itself for a reasonable time.
Moreover, another thumb suggestion is, normally, that you should not open positions when prices are in the intermediate area between attractors.
A technique to put some interesting and ungunned stop losses, could be to puth them a little above or a little below the attractors themselves.In this way you stop, if short, when prices are leaving the attractor to go higher. To do this, put stop a pair of ticks over the attractor upstanding.
Obviously, viceversa if you are long.
[Robur analysis /]
RESISTANCES AND SUPPORTS CALCULATED USING PROPRIETARY METHODS (as the matter is psycho-metric, on the relative projections, not necessarily the supports from last three months should be larger than the ones from last month: they are prices memorized [according with our research] by the operators).
On respect of last operational month(21 days), the nearest resistance should be:
10882.50 and the nearest support should be at:10834.71
Observing last three working months (55 days), the nearest resistance should be:
10882.50 and the nearest support should be found at:10834.71
It could also be useful to check,if the case, resistances and supports against attractors: if there are little differences, you could perhaps prefer attractors prices.
[Ares analysis /]
We remember the the last market day (2006/02/08) the opening was 10778.00 and last price (sometimes meaningless ?) was 10875.00. If you are interested in, read this: a useful settlement price that we are using could be 10873.00. The latter price should be considered, accordingly to our theories, as a very important attractor. We suggest to prefere this one if it should be near a regular attractor.
Seleukos © - FFDJ - Dow Jones future Front
Seleukos Automation Expert System Report © 2006/02/09 07:59
Hours are in Central European Time, that is 6 hours earlier than New York times. This can be the starting for a discussione in Fibonacci numbers...
Ragards
Seleukos Automation Expert System Report 2006/02/09 07:59
FFDJ (10873.00) - Dow Jones future Front
In our elaborations over medium term trend, this instrument is now BEARISH: the investor could have bought some time ago a related put or just sold the instrument itself.
If today the instrument should point above 10893.25, it could be convenient to close the opened operation if you are in a good profit.
However the true new trend should begin if our instrument should move above 10904.15. In this case, it could be convenient to buy the underlying instrument or a related call.
For statistical information purpose only and avoiding every relation for the future, from 02/01/2002 if someone had suited exactly the methodology, it could have obtained approximatively a yearly result of category 2(not bad): that is XX.XXXX%: this is not a good reason to think that this will repeat on the future.
Operations opened on observance of medium term instruments (see Tides on Seleukos site), should be managed for coherence observing the same medium term calculations avoiding to confuse them with short term suggestions: because we are speaking about two methods completely different, confusing the systems of one type with systems of the other type may generate some contradiction.
[Tides analysis 2006020907561]
Observing last 400 working days, this instrument has today the 0.5000% of probability to close over the yesterday's close (or at the same level).By obvious consequence, it has 99.5000% of probability to close below yesterday's close.
[HotDogs and FPA analyses /]
REAL TIME TRADING ANALYSIS: ALL COMPUTATIONS ARE TO BE USED TODAY ONLY.
You should pay attention today at the under exposed prices: they could be ATTRACTORS for the underlying instrument and, if the exposed prices will be crossed quickly, we have a lot of probability that the instrument will return on such suddenly crossed price and move around it.
Attractors which can unveil a possible new bull market (you can perhaps close a part of your existing bearish positions):
11062.98 - 11037.02 - 11020.96
Attractors which may suggest that we are near the end of the bearish phase(pay great attention):
10952.98 - 10927.02
Attractors revealing a sideway day, but the existing bearish trend is still alive (the ones with asterisks have more probabilities to be touched):
10885.00 - **10842.98** - 10830.00 - **10817.02** - 10775.00
Attractors which could suggest a confirmation for the current bearishness:
10732.98 - 10707.02
Attractors which could claim a more strength for the living bearish trend(you could reinforce existing positions):
10639.04 - 10622.98 - 10597.02
The system would suggest, in theory, to open positions only when instrument is going to clearly quit an attractor and only after prices had 'parked' near the attractor itself for a reasonable time.
Moreover, another thumb suggestion is, normally, that you should not open positions when prices are in the intermediate area between attractors.
A technique to put some interesting and ungunned stop losses, could be to puth them a little above or a little below the attractors themselves.In this way you stop, if short, when prices are leaving the attractor to go higher. To do this, put stop a pair of ticks over the attractor upstanding.
Obviously, viceversa if you are long.
[Robur analysis /]
RESISTANCES AND SUPPORTS CALCULATED USING PROPRIETARY METHODS (as the matter is psycho-metric, on the relative projections, not necessarily the supports from last three months should be larger than the ones from last month: they are prices memorized [according with our research] by the operators).
On respect of last operational month(21 days), the nearest resistance should be:
10882.50 and the nearest support should be at:10834.71
Observing last three working months (55 days), the nearest resistance should be:
10882.50 and the nearest support should be found at:10834.71
It could also be useful to check,if the case, resistances and supports against attractors: if there are little differences, you could perhaps prefer attractors prices.
[Ares analysis /]
We remember the the last market day (2006/02/08) the opening was 10778.00 and last price (sometimes meaningless ?) was 10875.00. If you are interested in, read this: a useful settlement price that we are using could be 10873.00. The latter price should be considered, accordingly to our theories, as a very important attractor. We suggest to prefere this one if it should be near a regular attractor.
Seleukos © - FFDJ - Dow Jones future Front
Seleukos Automation Expert System Report © 2006/02/09 07:59
Here we attach a random chart.
A coin was launched 1000 times
we obtained 513 heads and 487 crosses
Every head, a read trace was sent to the chart increasing one pixel.
Viceversa, for every cross, a cyan trace was sent to the chart decreasing one pixel.
An Elliot technician can find in this random chart every thing.
But not only an Elliot technician...
The little difference between 513 and 487 is enough to believe on a trend.
IN OUR OPINION, THIS IS A FUNDAMENTAL PROBLEM.
We can try to solve this with a fractal (Mandelbrot) approach.
In a spectrum analysis it is clear that every day moves always the same, but if we randomly set the movement of every day to one, two or three pixels, it is very difficult to discover that this one is random.
A coin was launched 1000 times
we obtained 513 heads and 487 crosses
Every head, a read trace was sent to the chart increasing one pixel.
Viceversa, for every cross, a cyan trace was sent to the chart decreasing one pixel.
An Elliot technician can find in this random chart every thing.
But not only an Elliot technician...
The little difference between 513 and 487 is enough to believe on a trend.
IN OUR OPINION, THIS IS A FUNDAMENTAL PROBLEM.
We can try to solve this with a fractal (Mandelbrot) approach.
In a spectrum analysis it is clear that every day moves always the same, but if we randomly set the movement of every day to one, two or three pixels, it is very difficult to discover that this one is random.
By using your coin-toss example as a critique of Fibonaci, you are assuming that markets are normally distributed.
They are not (although, to paraphrase Orwell, some markets are more normal than others).