Noob playing around with Fib retracements and Andrew's Pitchforks *pics*

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IronFist

This thread will be a series of replies because I could only attach one pic per post... so sit tight while I get the other pics loaded

edit - all charts are 2 min candlecharts from 2/2/07.



I left Fibonacci fans out because I can't get them to work, even after the fact.

Andrew's pitchforks = draw a line from the top of a trend to the bottom of a trend, and then pull the single end (the handle of the pitchfork) back to a previous low/high.

These seem to work well, after the fact, a lot of the time. Example:
<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1348949">

But had I pulled the handle back to any other highs/lows, it wouldn't have worked.
 

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This one follows the pitchfork almost exactly:

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1348951">

But seriously, I fail to see the predictive powers of these. How do you know which pitchfork lines will be support or resistance. It's more like "here are some lines where a reversal might happen." Does that actually help when you're trading?
 

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Sometimes it works for a little bit...

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1348955">

...and then the price breaks out of the pitchfork.

So we also don't know for how long it will follow the pitchfork. It would sucked to have gone long at 14:05 in that pic.
 

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Sometimes it works very well, like here, but look at all the other low points I could have connected the handle too... and every single one of them would have given an unusuable pitchfork. The problem here is I moved the pitchfork around until it fit the candlesticks. Is there anyway to do this ahead of time?

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1348959">
 

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Ok, I'll stop wasting bandwidth now and just explain my issue with Fibonacci retracements. I have the same exact problems:

1. Sometimes they work
1.5. and you can't be sure until after the fact
2. So you have these lines where reversals might happen... is there any way to predict at which lines that might happen? "Ooh, it's gonna hit a line... do I short or go long?" "Ooh, it broke through the line... is that confirmation or should I short now because it's about to reverse?"

etc.
 
Quote from IronFist:

Sometimes it works very well, like here, but look at all the other low points I could have connected the handle too... and every single one of them would have given an unusuable pitchfork. The problem here is I moved the pitchfork around until it fit the candlesticks. Is there anyway to do this ahead of time?

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1348959">
More...

IF,
You should read some of Tim Morge's work on Andrews,download the original work and think about taking the "pitchfork primer" course..Its not expensive...
 
Quote from IronFist:

Ok, I'll stop wasting bandwidth now and just explain my issue with Fibonacci retracements. I have the same exact problems:

1. Sometimes they work
1.5. and you can't be sure until after the fact
2. So you have these lines where reversals might happen... is there any way to predict at which lines that might happen? "Ooh, it's gonna hit a line... do I short or go long?" "Ooh, it broke through the line... is that confirmation or should I short now because it's about to reverse?"

etc.
More...

Three words for you... syngergy synergy synergy. Accumulation of edges. If you have 3 median lines on different timeframes overlapping eachother dont you think it would make it stronger? Nothing is 100% that is why you have to rank with other confirming factors and edges. Once you have that down you start a trading plan and then face the different aspects of trade management. IE entry techniques, units, and profit targets. I recommend you do some research on Tims site, it offers a lot of valuable, free information. Soon enough you will be able to trade with odds and probabilities and not 20/20 hindsight.
 
NOOB, you want this to be as simple as putting an indicator on a
chart and rake in the money. So do we all. You have to learn about the markets as you would any other business. Just because I own a hammer it dosen't make me a carpenter

I use Fibs as my sole market tool....nothing else. But i studied alot of other things and sat in front of the monitor all day for over 2 years and the fibs are just now making sense to me. Anyone can have a successful trade but it is consistency that matters and money management.

It's there if you dont get discouraged first.
 
Quote from phillyflipper:

NOOB, you want this to be as simple as putting an indicator on a
chart and rake in the money. So do we all. You have to learn about the markets as you would any other business. Just because I own a hammer it dosen't make me a carpenter

I use Fibs as my sole market tool....nothing else. But i studied alot of other things and sat in front of the monitor all day for over 2 years and the fibs are just now making sense to me. Anyone can have a successful trade but it is consistency that matters and money management.

It's there if you dont get discouraged first.
More...

Hi PF,

What software do you use for your fib analysis??
 
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