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Applying Fibonacci Cluster and Confluence Zones
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Applying Fibonacci Cluster and Confluence Zones

  #151 (permalink)
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@Fat Tails, @ThatManFromTexas

What are your thoughts on where I can find something similar and not have to shell out 1500?

@SpyderTrader

This is outside my realm of knowledge. Sorry.

@Fat Tails is the keeper of the knowledge on this concept.

I'm just a simple man trading a simple plan.

My daddy always said, "Every day above ground is a good day!"
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  #152 (permalink)
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As usual I wanted to start my own thread.....glad to see Fat Tails started this 2 years ago!! lol

So I discovered an interesting indicator, and I'm uploading screenshots from last week.

No idea how they plot the levels, but apparently it plots the same fib level from multiple timeframes in the same chart (at least, thats my guess).

User can select how strong the level is, for example a setting of 1 will only plot one 0.618 retracement line, but a setting of 3 will plot three 0.618 retracement lines.

Each fib level is marked by a dot.....when to buy, when to sell, and where to put your stop.

@Fat Tails, @ThatManFromTexas

What are your thoughts on where I can find something similar and not have to shell out $3000?

See screenshots for illustrations.


The indicator detects Fibonacci retracements and expansions and displays them as diagonal lines. However, there are so many of these lines that there should be always one of them matching the high or low. You just need to select the correct one afterwards.

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  #153 (permalink)
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Anyone have a good Fibonacci Cluster methodology?


Hi Guys and Girls,

I am trying desperately to move from day trading to swing trading and from 15 and 60m time frames to daily time frames. I am finding that getting in on a break of any kind of moving average or candlestick and getting out on another break of a ma is for me, a waste of time. So I decided to try to invent a way to get out by using the" set it and forget it tactic." Get in on a break of a certain fib retracement, and get out when the 1.27 or 1.68 is hit.(Or at least be ready to bail if it reverses at that point.) My problem with this is that you can go for days without finding a good trade, especially if you want the confirmation of a triple line cluster of fibs to get in! Yet I t have seen this work very well for one guy in particular and I want to see if I can emulate this strategy. Anyone have any tweaking or ideas they have about Fibs and how they make them work, or think they fail? I'd like to hear all sides. And no...I do not agree that Fib numbers are all psychological or that big players watch to see what happens at those points. As it has been pointed out here already, if you put enough lines on a chart,one of them will hold. I am talking about when price breaks thru 3 fib lines 1/8 inch apart, and they consistently hold up! Whether they got there from 3 different points on your chart or 3 different chart time frames superimposed on one, WHO CARES! Who has done the math on a break of the .786 for instance with 2 more fib lines of any number above or below it? I have and so far, it is scary. And perfect for use on a daily chart too! Mach26, I will have to find out what you are doing that you can make so much use out of the MT4 platform for Fib work. Awesome!

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  #154 (permalink)
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Daytrader50 View Post
Hi Guys and Girls,

I am trying desperately to move from day trading to swing trading and from 15 and 60m time frames to daily time frames. I am finding that getting in on a break of any kind of moving average or candlestick and getting out on another break of a ma is for me, a waste of time. So I decided to try to invent a way to get out by using the" set it and forget it tactic." Get in on a break of a certain fib retracement, and get out when the 1.27 or 1.68 is hit.(Or at least be ready to bail if it reverses at that point.) My problem with this is that you can go for days without finding a good trade, especially if you want the confirmation of a triple line cluster of fibs to get in! Yet I t have seen this work very well for one guy in particular and I want to see if I can emulate this strategy. Anyone have any tweaking or ideas they have about Fibs and how they make them work, or think they fail? I'd like to hear all sides. And no...I do not agree that Fib numbers are all psychological or that big players watch to see what happens at those points. As it has been pointed out here already, if you put enough lines on a chart,one of them will hold. I am talking about when price breaks thru 3 fib lines 1/8 inch apart, and they consistently hold up! Whether they got there from 3 different points on your chart or 3 different chart time frames superimposed on one, WHO CARES! Who has done the math on a break of the .786 for instance with 2 more fib lines of any number above or below it? I have and so far, it is scary. And perfect for use on a daily chart too! Mach26, I will have to find out what you are doing that you can make so much use out of the MT4 platform for Fib work. Awesome!

The problem with FibonacciLines is the multitude of them.

-> different swing sizes (depending on mimimum deviation as a multiple of the ATR)
-> different types of lines (swing highs and lows, retracements, expansions, projections, alternates)
-> different ratios (23.6%, 38.2%, 50.0%, 61.8%, 78.6%, 100%, 127.2%, 161.8%, 200.0%, 261.8%, 300.0%)

and you end up with a lot of lines, see chart attached. However, there are confluence areas where the probability of a reversal is increased giving you an edge to exploit.

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  #155 (permalink)
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Trying to follow Fib Trader Carolyn Boroden...but fear info overload.

Tails, thank you for your commentary. I agree 100% about how you wind up with too many lines on your chart searching for clusters and confluence from other areas or time frames. But Im trying to follow the worK and methodology of Carolyn Boroden and one other Fib Analyst as they both are able to chart Fib Clusters and winding up with pretty clean looking charts. Anyone here know about Carolyns Fibonnacii work. I stupidly took a free trial to her room a year or 2 ago and never was able to wake up in time to use it. She so far is one of the best "Fibby's" out there and I wonder why she even bothers selling a newsletter and chat rtoom if she is so good. But her book simply called "Fibonacci Trading" is way better than any other book I have ever read on the subject. Unfortunately, even if you just stick to integrating Fib's into your charts or trading as the primary method for choosing entries and/or exits, I see by just her book alone it could take you a lifetime to eyeball a chart and know where target "areas" approximately are! I have spent years following her work and similar methods to it but it seems Fib work burns you out after a while. Psychologically, it can get very nerve wracking in the way that Elliot wave counting would be as there is no way and yet too many ways to find one trade in a week you could feel confident in. I spent years on Elliot waves before realizing they were ewither worthless, or not worth the effort for the results you get. I am not feelinmg that way about Fib confluence areas, especially in heavilly traded instruments like Forex spot and Forex Futures. If any of you have a way to simplify this work, let me know.

I am working on a few ideas, as well. Sadly as I said before, burning myself out with Elliot Wave garbage and also soooooo many software vendor presentations that Ninja Trader as well as Mirus Futures offer every day is unbelievably overwhelming. Talk about wanting to roll up in the fetal position from information overload. Whew! This leads me to condense this post into 3 questions:


Any thoughts on Carolyn Boroden and her methodology?

Any thoughts on how to handle info overload? (Heck, you can burst just from all the great info on this one forum!)

Anyone come up with a way to simplify Fib trading clusters?

peace, daytrader50

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  #156 (permalink)
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Daytrader50 View Post
Tails, thank you for your commentary. I agree 100% about how you wind up with too many lines on your chart searching for clusters and confluence from other areas or time frames. But Im trying to follow the worK and methodology of Carolyn Boroden and one other Fib Analyst as they both are able to chart Fib Clusters and winding up with pretty clean looking charts. Anyone here know about Carolyns Fibonnacii work. I stupidly took a free trial to her room a year or 2 ago and never was able to wake up in time to use it. She so far is one of the best "Fibby's" out there and I wonder why she even bothers selling a newsletter and chat rtoom if she is so good. But her book simply called "Fibonacci Trading" is way better than any other book I have ever read on the subject. Unfortunately, even if you just stick to integrating Fib's into your charts or trading as the primary method for choosing entries and/or exits, I see by just her book alone it could take you a lifetime to eyeball a chart and know where target "areas" approximately are! I have spent years following her work and similar methods to it but it seems Fib work burns you out after a while. Psychologically, it can get very nerve wracking in the way that Elliot wave counting would be as there is no way and yet too many ways to find one trade in a week you could feel confident in. I spent years on Elliot waves before realizing they were ewither worthless, or not worth the effort for the results you get. I am not feelinmg that way about Fib confluence areas, especially in heavilly traded instruments like Forex spot and Forex Futures. If any of you have a way to simplify this work, let me know.

I am working on a few ideas, as well. Sadly as I said before, burning myself out with Elliot Wave garbage and also soooooo many software vendor presentations that Ninja Trader as well as Mirus Futures offer every day is unbelievably overwhelming. Talk about wanting to roll up in the fetal position from information overload. Whew! This leads me to condense this post into 3 questions:


Any thoughts on Carolyn Boroden and her methodology?

Any thoughts on how to handle info overload? (Heck, you can burst just from all the great info on this one forum!)

Anyone come up with a way to simplify Fib trading clusters?

peace, daytrader50


There are various approaches to using Fibonacci trading. There are a few books around. The most complicated approach is the one used by Constance Brown. It is much more complicated than the concepts by Carolyn Boroden.

Carolyn Boroden was a follower of Robert C.Miner. I largely prefer his book "High Probability Trading Strategies" to "Fibonacci Trading" by Carolyn Boroden. I have read both books. If you look for something straight and simple, I would also recommend to have a look at Larry Pesavento's book "Trade What You See".

Here is a thread on Carolyn Boroden:

https://futures.io/vendors-product-reviews/4846-fibonacci-queen.html

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  #157 (permalink)
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Fat Tails View Post
The problem with FibonacciLines is the multitude of them.

-> different swing sizes (depending on mimimum deviation as a multiple of the ATR)
-> different types of lines (swing highs and lows, retracements, expansions, projections, alternates)
-> different ratios (23.6%, 38.2%, 50.0%, 61.8%, 78.6%, 100%, 127.2%, 161.8%, 200.0%, 261.8%, 300.0%)

and you end up with a lot of lines, see chart attached. However, there are confluence areas where the probability of a reversal is increased giving you an edge to exploit.


Hi Tails

I agree with you on all the lines. I only use 38.2% and 61.8% for retracements and 61.8%, 100% and 161.8% for expansions (ABC projections).

The key is to know from where to draw the retracements and which ABC's to use for the expansions. There is some good fib tools out there to clean up the charts as well.

I'll do a post with an example if someone is interested.


Last edited by Pietvw; June 17th, 2012 at 03:22 PM. Reason: added fib before tools
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  #158 (permalink)
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Hi Tails

I agree with you on all the lines. I only use 38.2% and 61.8% for retracements and 61.8%, 100% and 161.8% for expansions (ABC projections).

The key is to know from where to draw the retracements and which ABC's to use for the expansions. There is some good fib tools out there to clean up the charts as well.

I'll do a post with an example if someone is interested.

@Pietvw: I am interested.

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  #159 (permalink)
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@Pietvw: I am interested.

Hi Tails

Let's take gold. I have drawn in all the fib retracements showing only 38.2% and 61.8%. As you can see, it looks the same as yours - a mess and difficult to see where the market is and what is going on:

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The next chart shows the same retracements, but put on the right hand side of the price so it doesn't block the view of the market.

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It also allows you to clearly see where confluence is formed with the 38.2% and 61.8% in proximity to one another:

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Clarity plays a very important role to me in my trading and this tool helps a lot!

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  #160 (permalink)
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Too much space between your fib numbers for confluence.


Sorry my South african colleague,

I dont agree at all,especially with your 2nd chart. There is way too much space betwwe. 38.2 and 681 for it to be confluence. I also (and so does Carolyn and others) require 3 numbers/liners to be very close together to be confluential. I would say 1/2 an inch between all three lines on a chart like yours. But....your methodology may maek that way of trading profitable for you because you have great entrys and exits. For me, I cant use that. But thanks for posting the charts. You put a lot of time into them. And IMHO thats part of the fib worlds problem. They take too much time. Now...who was saying they know of some good software to "sort this all out?" Please....do tell! Do tell! -)

DT50

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