The only way to trade with fibonacci

[1a2b3cppp]

Quote from konviction:

http://en.wikipedia.org/wiki/Golden_ratio

That link just explains fib numbers and has one bullet point about how some people say it indicates resistance points in the market but it's disputed.

It doesn't explain how or why or where the correlation from [unrelated mathmatical property] to [financial market application] comes from, which I believe is what he was asking.

 

[1a2b3cppp]

Quote from konviction:

lol no genius, the price I bought at was 73.78.. i dont buy on the lines all the time, I just look for them to hold up.

I was referring to your 78.6% fib line. Wow, I had some numbers dyslexia on that one :eek: My bad on that one.

So you bought at the 61.8% fib line. I bought there, and 50, and 38.2%, so my cost basis was lower than yours and I got more profit when price retraced back up to 100%.

konviction, how do you determine your stop losses when trading fibs?

 

[1a2b3cppp]

Quote from chrisjs87:

I'm still waiting for one of you Fib supporters to explain why Fib works and how exactly it applies to market prices.

Here is the only post I could find that tries to explain why fibs are applicable to the financial markets.

If you read it in its entirety, however, you will see that there is no explanation other than "it only makes sense that since nature follows specific laws the same laws should be appliacble to price movements."

If you're at all rational, you will see that makes no sense and is neither logically supported nor relevant at all, but that is the kind of mumbo jumbo that "fib gurus" spout.

The first section is all correct. The last paragraph is where the lol begins (where he tries to apply it to financial markets).

That poster goes on to get flamed in that thread for his explanation.

The post is the attachment.

The thread is here: Link

 

[konviction]

Quote from 1a2b3cppp:



no explanation other than "it only makes sense that since nature follows specific laws the same laws should be appliacble to price movements."

and why is this so illogical? If a large enough group of people believe that they work, then yes, as stupid as you keep flaming that it is, then its going to work regardless.

Why do people buy homes they cant afford?..its illogical, but MILLIONS of people have done it..and they will continue to do it..if they know they cant afford it, but buy it anyway, then they will be foreclosed ....

same thing in the market... there is a large enough group that believe they work, and therefor the theory holds up... it doesnt have to make sense

"the market can stay irrational longer than you can stay solvent"

Ever hear that quote.

 

[konviction]

Quote from 1a2b3cppp:



konviction, how do you determine your stop losses when trading fibs?

My stop loss is ususlly at a swing low..in this case, 70.

 

[SomeYoungGuy]

1a2b3cppp, I am interested in your Fibonacci Trading Course and would like to subscribe to your newsletter. lol

 

[1a2b3cppp]

Quote from konviction:

Quote from 1a2b3cppp:



no explanation other than "it only makes sense that since nature follows specific laws the same laws should be appliacble to price movements."

and why is this so illogical?

Because you're taking something that is definitely outside the realm of financial markets and trying to apply it to the financial markets.

It's exactly as illogical as applying something like the progression of Tennis Scores, which are definitely outside the realm of financial markets, (0 (love), 15, 30, 40) and trying to apply that to the financial markets.

Or taking a progression of prime numbers, which are definitely outside the realm of financial markets, and trying to apply that to the financial markets.

Or taking [anything] that is outside the realm of the financial markets and trying to apply it to the financial markets.

Is the fibonacci sequence a "real thing?" Yes, absolutely. That wiki article explains it.

But is completely outside the realm of trading and that is why it makes as much sense to apply it to trading as it does to apply Tennis scores or prime numbers or anything else.

I'm not sure how else I can explain it.

I mean think about it. You're saying that a ratio of numbers (that may or may not even be found in nature) are somehow appliacble to psychology. That's a collosal stretch.

Ratio of things in nature != psychology. That's as absurd as saying the number of pellets in a bag of dog food can predict basketball scores.

If a large enough group of people believe that they work, then yes, as stupid as you keep flaming that it is, then its going to work regardless.

A large enough group of people = noob traders. Although I cannot confirm it, I seriously doubt that hedge fund managers or pro traders use fibs.

Why do people buy homes they cant afford?..its illogical, but MILLIONS of people have done it..and they will continue to do it..if they know they cant afford it, but buy it anyway, then they will be foreclosed ....

Now you're comparing entirely unrelated things.

Pointing out one illogical behavior does not prove another.

You're trying to say that "people buy homes they can't afford. That is illogical. Therefore, fibonaccis must also work because that is also illogical."

You'd fail Intro to Logic 101 with that argument.

I can tell you're trying to emotionally rationalize rather than logically rationalize, which at least suggests that you are passionate about trading, and that's a good thing. But emotional traders lose money and emotional arguers lose arguments.

same thing in the market... there is a large enough group that believe they work, and therefor the theory holds up... it doesnt have to make sense

Read this page and see if you can identify the fallacy in your argument. Hint: I just described it in the previous section.

http://en.wikipedia.org/wiki/List_of_fallacies

"the market can stay irrational longer than you can stay solvent"

Ever hear that quote.

Yes, but it's not relevant to what you're talking about.

 

[1a2b3cppp]

Quote from SomeYoungGuy:

1a2b3cppp, I am interested in your Fibonacci Trading Course and would like to subscribe to your newsletter. lol

Newsletters are for scam artists trying to build a list of names. They disguise it as a "newsletter" which they use to send out shitty "advice" each week and sometimes cross-promote other scam artists' shitty products. Fuck that shit.

Just subscribe to this thread

 

[1a2b3cppp]

Quote from konviction:

My stop loss is ususlly at a swing low..in this case, 70.

Do you look for specific relations between the position of the swing low and the fib lines? In other words, what if the swing low is 50 points away from the lines, vs, 10 points away. Would that make any difference to you?

 

[konviction]

Quote from 1a2b3cppp:

Do you look for specific relations between the position of the swing low and the fib lines? In other words, what if the swing low is 50 points away from the lines, vs, 10 points away. Would that make any difference to you?

It doesn't matter how many points really, its a matter of % risk in the account that I'm taking.. 1pt, 3.5, 4pts...doesn't matter, my risk never changes.

----

But is completely outside the realm of trading and that is why it makes as much sense to apply it to trading as it does to apply Tennis scores or prime numbers or anything else.

Obviously it's not outside the realm of trading if hundreds of thousands of people use it, now is it? It's like saying "OH cigarettes are completely outside the realm of lung cancer"... which is indisputable, as smoking is the #1 leading cause. I'm not emotional in my trading, but yes I am passionate about it, there is a difference.