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Fibonacci Queen

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Market Wizard
Berlin, Europe
 
Trading Experience: Advanced
Platform: NinjaTrader, MultiCharts
Broker/Data: Interactive Brokers
Favorite Futures: Keyboard
 
Fat Tails's Avatar
 
Posts: 9,798 since Mar 2010
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tomasito View Post
A few years ago before Carolyn went for the big money I spent some time in her room. Mark often hosted and I found him to be a better instructor. Carolyn was reasonable. She cut me a deal for the room, a fraction of what she charges now. She seemed a bit bored with trading. She used "FibTrader" then DTI, which is more expensive and complicated.

I didn't find Fibs very useful in the long run and have spoken to someone who has tested them over time, deciding that at least on their own, there is no edge in using them. If you can find a confluence of price support or resistance I would say that would give you a better edge.


I have run some probability distributions on fibs. They give you a moderate edge. If you use confluence zones you can combine the smaller edges into larger edges. Just scan the chart for all sorts of lines including classic support and resistance zones (= 100% retracements), retracements, expansions, projections, measured moves.

The other way to apply fibs is to look at the 38% and 50% on a 60 minute chart (3-day-period) and the 76% on intraday charts for ES. These levels give you an edge. The 50% level over a 3-day-period /balance point) will also add a bullish or bearish note to the price action.

Examples: I trade TF, so the examples below are for TF. The first chart shows confluence zones, the second one the bullish bias show by the balance point with a fib retracement overlay. Note that the price action never stopped exactly at the 38% or the 50% line, but that these levels confirm the bullishness. Of course you can also use 37.5% (3/8) 50% (4/8) and 62.5% (5/8), etc. This would barely make a difference, but fibs are more fashionable.

Attached Thumbnails
Fibonacci Queen-confluencezones.jpg   Fibonacci Queen-fibs-balance-point.jpg  

Last edited by Fat Tails; October 2nd, 2010 at 06:58 PM.
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