POLL: Are Fibonacci numbers a worthless or expensive crutch when it comes to trading?

[Thunderdog]

Quote from MAESTRO:

Just because I like you, here is what I mean

Thank you, MAESTRO. And a Happy New Year to you.

We definitely do not trade alike. Besides, those "Fibonacci" lines look like fairly straightforward channel lines. I'm guessing you could have achieved similar performance without those specific Fibonacci values but with something more mundane and generic.

I questioned Pabst because I was under the impression, from previous exchanges with him, that he specifically looked at Fib retracements. Perhaps I am mistaken...

 

[MAESTRO]

Quote from Thunderdog:

Thank you, MAESTRO. And a Happy New Year to you.

We definitely do not trade alike. Besides, those "Fibonacci" lines look like fairly straightforward channel lines. I'm guessing you could have achieved similar performance without those specific Fibonacci values but with something more mundane and generic.

I questioned Pabst because I was under the impression from previous exchanges with him that he specifically looked at Fib retracements. Perhaps I am mistaken...

Happy New Year to you too! The distance between those lines is calculated using Fibonacci numbers. The middle line is a cubic spline function and the channels are fibs. And no it just looks the same as your normal Bollinger bands or something similar. Those are totally different lines. It's all about probabilities!

 

[Fib Gridsman]

Quote from MAESTRO:

Do the seeds of a sunflower grow forming the Fibonacci spiral? Yes, of course. Can one predict where exactly each seed will be located in the plant? NO! There is a huge misunderstanding between stable stochastic patterns and the ability to predict the outcome of a random event. Everything, therefore, boils down to the lack of education, unfortunately. Fibonacci numbers are the probable points of concentration, but the distribution around these points varies. So, yes Fibonacci numbers as well as Gaussian distribution and many other stochastic models work well except they cannot predict the outcome of one particular run on the series of events.

Well said, Maestro.

 

[magicdust]

They work for me...that's all I have to say...

 

[NUTSNEAL]

It is extremely sad to me that two very intelligent people are unable to devise a test with at least a FFFEEEEWWWWW less flaws. They did a very nice job to a point and then just completely fell off the track. I am not from a math background, although I was a statistics tutor in college.

They have 16 ratios all mixed together and some based on price and others on time. You have got to be kidding me!!!!!!

If we were looking for acticity in this pool they set up, they intruduce so much mud and unrelated bubbles a great white shark could bite us in the ass and we wouldn't even see it coming.

NUTSNEAL

Quote from TraderZones:
"Our conclusion must be that there is no significant difference between the frequencies with which price and time ratios occur in cycles in the Dow Jones Industrial Average, and frequencies which we would expect to occur at random in such a time series... The evidence from this paper suggests that the idea that round fractions and Fibonacci ratios occur in the Dow can be dismissed."

http://www.cass.city.ac.uk/media/stories/resources/Magic_Numbers_in_the_Dow.pdf

It is a hard thing, separating believers from their belief. [/size] [/B]

 

[infolode]

I guess someone needs to develop a work around for the time-price exchange. That would entail chart scaling issues and/or projective geometry.

We would then need to edit our list of numbers for probable turning points.

Lastly, we would test this on wheat (ancient to present) to establish the presence (or lack thereof) of fibonacci
numbers or derivatives. Also to test the validity of the self-fulfillment theory.

Fortunately, this has already been done years before my birth and Leonardo of Pisa's as well.

I can almost picture Emperor Maurice Tiberius projecting rainfall and the price of wheat and bronze on his Byzantine tablet.