"The only way to trade with Fibonaccis" journal

Screw it, I gotta run. Trade ended early, got a bad fill, out at 1149.50.

Avg Buy Price: 1149.50
Avg Sell Price: 1150.58
9 contracts

$486 before commissions
$444.60 after commissions

Here's a pic of the trade after it was closed. The 3 red arrows are where I entered short, and the green arrow is where I closed the trade just now.

$5,386 profit for the week.
 

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1. I don't understand how this would disprove fib. Obviously this would imply each level reduces supply.

2. Even though you're making money and it's working for you, there's a more profession way of trading Fib levels (just like any other level).

3. This proves a few other theories correct.

I'm sure there's a 4 and 5 i'd like to add, but needless to say nice job. Congrats. Very simple and that's the best thing about it.
 
Do you have any statistics for your system on the breakdown of retracements? (e.g.: 50% retraced to the 38% mark before returning to 0, 20% went to 100%, etc, etc.) I'm just curious if you ever tried to weight your position sizes to tweak your expectation based on that type of info.
 
Quote from 1a2b3cppp:






the trade is dependent upon the range of the fib retracements that I draw.


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i think i understand when you say fibs are not magic numbers;
in a nutshell what you are saying is that if fibs were strippers you will surely have a lap dance with each and everyone of them but you will not marry any of them;
:D
have a nice weekend
 
Only one trade today. The next retracements would've been drawn over a range of 6 ES points and I wasn't comfortable taking a trade that wide right now.

Total for the week: $1,133.10
 

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Quote from TheGoonior:

Do you have any statistics for your system on the breakdown of retracements? (e.g.: 50% retraced to the 38% mark before returning to 0, 20% went to 100%, etc, etc.) I'm just curious if you ever tried to weight your position sizes to tweak your expectation based on that type of info.
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No. What's most important to me is that the max win is greater than the max possible loss. Any changing in the weighting of my position sizes would mess this up (unless I added even more to the 3rd entry which I don't want to do).

I believe that price is essentially random* so having max winner > max loser is important to me. Any correlation between a specific level and how often it retraces would be random. Remember, fib numbers are just random. Price isn't drawn to them and they have no magic powers or anything.

Good question.


*if I didn't believe price was random, then my trading system would be SIGNIFICANTLY different. I would pick a direction and load up from the beginning if I could pick direction, rather than averaging down like I do now.
 
Quote from 1a2b3cppp:

Only one trade today. The next retracements would've been drawn over a range of 6 ES points and I wasn't comfortable taking a trade that wide right now.

Total for the week: $1,133.10
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Reduce your size then. Same trade though.
 
interesting thread.

random prices can be beaten by averaging down.

If you were profitable over 1000 trades... I think it would validate that the fib numbers are magic. Because you can't beat random prices and trading costs by averaging down.
 
Quote from athlonmank8:

Reduce your size then. Same trade though.
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Can't really reduce any more than starting with one contract :)

I mean I could scale in differently but I'm content with how I do it now.
 
Quote from jem:

interesting thread.

random prices can be beaten by averaging down.

If you were profitable over 1000 trades... I think it would validate that the fib numbers are magic. Because you can't beat random prices and trading costs by averaging down.
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No it wouldn't, because this method would also work with non-fib percentages being used. Remember, I normally don't even use fibs. I'm only doing it for this thread because I want to have the only profitable, non-vague, non-BS fib method out there.

Fibs are used in this system, but they're an afterthought. The system is not based on them.
 
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