Fibs don't work

Furthermore, the reason why I say its a bit hindsight, is because that low that we use at 3810, we don't really know at the time that it will be the ultimate low. If we do this in real time, we might think the low at the blue fib retracement will be the low, and sure, here it turns just shy of the 38.2, but breaks the 23.6. And if we see it go lower, and the try and use the next low at 3821, which forms the pink fib, assuming this is now the ultimate low, we see that price does break the 23.6 again, but doesn't make it to the 38.2. Its only the final low at 3810, which allows us to draw the green fib, that the magic starts to happen at multiple levels.

2022-05-22 2128.51.png


I guess what I'm saying is that for every time we turn at 38.2 or 50 or 61.8, which makes it looks like magic, we fail just as often during other times, or have completely different swing points. Maybe if you figure out good entry criteria, and good combo of stop and target, you can have a winning strategy, but I'm not sure if its enough on its own.
 
I fully agree. All I am saying that it is good to know where the fibs are located. I am not promoting every fib as an entry but the rejection of a fib area gives confidence to your position entry. In your example that the first retrace exceeded the 23.6% but reversed prior to reaching the 38.2% -- well that is a pretty good indication that we are not in a reversal and that the downtrend can be risked to continue.
 
volpri said:
Fibbers will be fibbers I guess. Lol. Cherry picked fib line charts are easy to post. What about the times it don’t work. Have you ever tracked the ratio?
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Cherry picked huh. Really, taking the last two major $SPX swing low points upto all time high and nailing the current swing low retracement is a basic run of the mill rinse repeat use of fibs.

As for failures you betcha. That is why you don't use them, like eeeeeeeeverything else, in isolation. I've mentioned this numerous times.

Move along now if you don't see that. Don't you have a blog or something to impress the newbs with?
 
SunTrader said:
Cherry picked huh. Really, taking the last two major $SPX swing low points upto all time high and nailing the current swing low retracement is a basic run of the mill rinse repeat use of fibs.

As for failures you betcha. That is why you don't use them, like eeeeeeeeverything else, in isolation. I've mentioned this numerous times.

Move along now if you don't see that. Don't you have a blog or something to impress the newbs with?
More...
huh?
 
We all trade with our individual edge , be it Fibs via extensions or retracements.

We possibly all use different levels, for entry and exits. and (Time Frames)

But if YOUR Edge - Fib level works for YOU , and you are consistently making a % per day-week-month

that suits you. Good on you.
 
I concur that today, when looking at the whole day, some good fibs provided very profitable trades. The pink fib from the low to A gave a nice 50% at B. You can even see a bounce at the 38.2% in there as well. Then using a new fib from the low to C gave the nice 50% at D, as @easymon1 points out. And then of course the very obvious fib from the low to point E, which gave the nice 50% at F. You can even see that at G was a solid 23.6 entry for a long, but clearly this would have to be just a scalp. If you tried the 38.2 at H, this too also fails until we hit the 50% at F.

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But what if we tried to use fibs earlier, close to the open. We see the move from A to B and draw in our retracement. It fails at the 23.6 if we tried a long. Then it fails at the 38.2, which I marked as C. It also fails at D, the 50%, and E, the 61.85. Heck, it even fails at F, the 78.6. Maybe there is a rule about you needing to see a very established trend yet, I don't know.

2022-05-23 2220.05.png


So now lets say we will draw a new fib on this down move. We did after all even break the low at the earlier A, so maybe the move is now gonna be south, and we will try and look for shorts at retracements. So we draw the fib from A to B. We go back up to C, the 38.2, and that short would fail. The 50% at D also fails, as does the 61.8% at E. Maybe we come close enough to the 78.6 at F to make a short entry, and that can get us some points, but if we are going to count trades that don't even hit a fib, because we are entering sooner, and we also need to count trades that poke a fib, we will be using quite wide entry criteria and hence stop criteria.

2022-05-23 2224.00.png



Now I'm not a fib expert, so maybe I'm doing a bad job of this and not following proper rules, but it seems to me that there are just too many fibs that can be drawn and in so many different ways. But I admit, when it works, it does seem like magic.
 
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