Fibonacci Retracements

what is the point of all this philosofucking about fibs???

trading ISN'T an academic exercise.....it's about MAKING MONEY!!!

now anyone who tells you that the markets follow fib numbers to that last tick is FULL OF SHIT!!!

but the people who insist that fib numbers aren't significant in the markets are the ones who can't make money with them.....they wonder "why" it should work and they want PROOF that it does.......GIMME A FUCKING BREAK!!!

why should i show you how i make money with them??? if you don't want to see for yourself, that's your tough luck for being a pighead

for the newbies that want to learn.......just put up a chart in any timeframe.....put some fib numbers between two swing points and WATCH!!!! OBSERVE!!! you will get ideas about how the markets work, and you have just added another piece of knowledge that could help make you a lot of money someday
 
Originally posted by darkhorse

Where is the benefit in saying 'fib will work here unless it doesn't'?
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Trying to make an indicator work under all conditions is sure way to decrease its usefullness. I think your onto the problem with fibs though, you can draw the lines everywhere. Who says you have to use high and low. Why not just line them up with price pivots and put them where they fit the best? We all know there is a danger of seeing whatever we want to in the charts, and with fibs that is especially true. I quit using the fibs because i only paid attention to them when they told me what i wanted to hear.

I would say they make convienent levels for reversals to take place. That was a great example by sarasota of when you could use them even if you dont know why.

if you wanted to know where todays nq would stop you just had to look at the 30 min fibs, in hindsight.
 

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Originally posted by darkhorse



Credit where credit is due-

let the record state I spoke in haste and stand corrected.
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No problem. Like I said before, I respect your opinion either way. However, with some other people ..........
 
Originally posted by redzuk



I would say they make convienent levels for reversals to take place. That was a great example by sarasota of when you could use them even if you dont know why.

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This brings up an interesting point. Even if you do not believe in the fib numbers and their ratios, squares and reciprocals, enough traders do believe in them. That is why you see bounces off them when you combine the .382 and the .618. Even if the bounce doesn't last long, hopefully you have the ability to manage a trade and move your stop up to or near break even.
 
Originally posted by Sarasota


Looking at your profile, we see you like to dance. Care to explain further, because I am the one who is now :confused:
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What exactly are you confused about? I dance salsa and merengue...have done so for years. Nothing really mysterious there..

As for your Fib trading. As i've said many times, you can't really knock something that is making money. In your case though, you may think it's this magic bullet you've discovered that is making you money (if indeed you are) but i'd say it's other things. Trading off pullbacks is as old as the sun (and a great way to trade...do it myself). Just cos Fib uses a number like 382 or 618 to describe it doesn't add a whole of significance to it...even though you evidently think it does.

BTW, i am mortally wounded that the thousands of newbie schmuks here that are losing their asses everyday think i look foolish...
 
Originally posted by daniel_m


What exactly are you confused about? I dance salsa and merengue...have done so for years. Nothing really mysterious there..

As for your Fib trading. As i've said many times, you can't really knock something that is making money. In your case though, you may think it's this magic bullet you've discovered that is making you money (if indeed you are) but i'd say it's other things. Trading off pullbacks is as old as the sun (and a great way to trade...do it myself). Just cos Fib uses a number like 382 or 618 to describe it doesn't add a whole of significance to it...even though you evidently think it does.

BTW, i am mortally wounded that the thousands of newbie schmuks here that are losing their asses everyday think i look foolish...
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Your reading comprehension isn't very good. Way back when this thread started, I was defending fibs. I said they do work when you combine .382/.618 combos within a point on the S&Ps, and you can expect to see a bounce, but I also stated that this isn't really the way I trade anymore. If I had to guess, fib combos are only about 10% of what I do.

Thanks for clarifying your dancing.
 
Wow, almost missed this one, here is my take on it as I promised before...

Fib#:

1. Mathematically:

Definition :
F(0) = 0,
F(1) = 1,
F(n) = F(n-2) + F(n-1) while n>=2. Looks like this:

0,1,1,2,3,5,8,13, 21,34, 55, 89…

Fib Ratio: F(n)/ F(n+1). Looks like this:

0/1=0, 1/1=1(100%),
1/2 = 0.500 (50%),
2/3 = 0.6666(66.66%),
3/5 = 0.600,
5/8 = 0.625,
8/13 = 0.6154,
13/21 = 0.619,
21/34 = 0.617,
34/55 = 0.6181,
55/89 = 0.6179…

So from above, you can see the ratio is fluctuate around 0.618, in other word, the larger the n in F(n), the more close the ratio to 0.618, the format is:

Limit F(n)/F(n+1) = 0.618 ------- known as golden ratio.

2. Naturally: Someone already gave the links to many examples in nature, I just want to add one, measure your height, and measure the height of your belly button, and calculate the ratio, if you are not a dwarf like me, you should have a number close to the Fib ratio (how close depend on how good your body looks :)

3. Psychologically: Scientific experiment proved that, if you ask certain amount of people, what’s the most beautiful rectangle they like, the one most people chose is the one with the size like : short side/long side = 0.618, try it yourself.

Above are prerequisite for the followings:

4. In the market: Now comes the fun part, consider this, if a stock(or mkt) drop for 10 pts (just for the argument sake) on bad news, and it start to bounce, how many pts will it bounce?

----------------------------------- 10pt
<-- x pts -->|

Let M1 = money involved long, and M2 = money involved short, you will get this equation:

M1/(10-x) = M2/x ----- (1),

showing the shares bought = shares sold ,

now, consider following cases:

A. M1 = M2, put into the equation (1), you get x = 5 (50% Fib ratio)

B. M1 = 2M2, x = 3.333 (33%, complement Fib ratio)

C. M1 = M2/2, x = 6.666(66%, Fib ratio)

...................

These are simplified calculation, just for the non math lovers to get an idea.

example, I will use today's intraday dow chart , see attached.


5. How to use it:

When mkt is trending, you wait for the reversal, once it started, you get in and wait till it close to Fib#, combined with tape if you trade intraday or chart, if you do 3-4 days swing, you decide your exit, again, this is only one EDGE you have, and you need to be disciplined...

Fib# is only one small part of my trading system, I just showed you the door, and you have to walk through it yourself, just like someone said, put it up, WATCH it, and after 1 month, trade it with stops.

Oh, one more thing, someone said his phone# is Fib#?, well, your phone# is a NUMBER LIKE STRING, you can't add, substract it, can you? other similar STRING (or characters) are: your social, your zip and your address ...

Good Luck
 

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