bobwest 

Maybe someone has some actual trading experience (not hindsight analysis of a chart) that will add to this discussion? Bob.

Well if my questionable experience counts for your definition of "actual experience"...
I plot them out every day to map out price areas between prior high-of-day/low-of-day to give myself context and frame-of-reference for where price has been and where it seems to be going. I also map out the extensions as well as stuff like Overnight high/low, prior close,etc. I see price behaving significantly around these fib-levels all the time, perhaps as a sort of self-fulfilling prophecy as someone else put it, or perhaps as sort of checkpoints along the way to more significant levels like yesterday's high or something. I get value out of them, others might not. just my 2 cents! Cheers!

Rrrracer 

LOL yes but... did you take the trade?!

Well, actually, no.

When you've got that much stuff on a chart, it's really hard to see the price bars, so it's hard to do anything.

But all that junk really looks good. Too bad you also have to trade.

Bob.

Rrrracer 

I am legitimately interested in what you, personally, think works or outweighs the effectiveness of fibs in the market

I would honestly say anything else you can think of as long as it is not Elliot wave theory.. I put fibs pretty much last along with Elliot wave.

For sure just hand drawn support and resistance lines or pivots. At least with pivots or hand drawn lines there is not this metaphysical ridiculousness involved. You don't con yourself into thinking they are anything more than they are. Just an on the fly messy calculation to filter out things because you can't take every trade.

snax 

Well if my questionable experience counts for your definition of "actual experience"... I plot them out every day to map out price areas between prior high-of-day/low-of-day to give myself context and frame-of-reference for where price has been and where it seems to be going. I also map out the extensions as well as stuff like Overnight high/low, prior close,etc. I see price behaving significantly around these fib-levels all the time, perhaps as a sort of self-fulfilling prophecy as someone else put it, or perhaps as sort of checkpoints along the way to more significant levels like yesterday's high or something. I get value out of them, others might not. just my 2 cents! Cheers!

I was actually thinking of your journal posts when I wrote this. I was not saying no one uses them, nor that they do or don't work; I was interested in getting some reports of what people are actually using.

I don't know one way or another about fibs, and I am pretty agnostic, in a friendly way, toward these and many of the "proportionality" or "ratio" ways of finding or measuring levels. So it's not that I have a problem with any of them in the abstract, it's just that I think it is much more important not to be abstract, but to focus on some real trading experience. Like yours.

What works is a lot more important than what does or does not have a good explanation abstractly. (Not that making sense abstractly is not a good thing either.... but I'll take results over explanations any day.)

By the way, I don't know if the self-fulfilling prophesy argument is what is actually going on -- that would imply that a lot of people are looking at those levels, which may or may not be true, but which is also kind of hard to check (how would you know how many traders are or are not? Do you take opinion polls? Would anyone tell you? )

As a practical matter, whatever works is what is important, and not everything that works for one trader will work as well for another, for whatever reason.

Bob.

a roll your eyes emoji?

All of technical analysis, at it's best, is of the same value. ALL derivative of the same 6 data points. Open, High, Low, Close, Volume and Time. Almost all of it is misunderstood or misinterpreted by the vast majority of people that look at it.

That said, if a specific data point on a chart as a visual waypoint gives someone the illusion of edge or after actually trading the "hallucination" with real money, provides an individual with measurable edge....to think that would be universal in design or application is pure nonsense.

You either make money or you dont. How each individual arrives at that binary and certain outcome cognitively is as different as the grains of sand on a beach.

wldman 

That said, if a specific data point on a chart as a visual waypoint gives someone the illusion of edge or after actually trading the "hallucination" with real money, provides an individual with measurable edge....to think that would be universal in design or application is pure nonsense. You either make money or you dont. How each individual arrives at that binary and certain outcome cognitively is as different as the grains of sand on a beach.

Just so.

Bob.

my rantish edict was not directed at you or any specific person. Rather, it was general in nature. The posts in the thread say more about the posters than the actual topic...IMO, of course.

Also , sorry for the $H!T grammar, I need to eat.

Dan

bobwest 

Just so. Bob.

wldman 

my rantish edict was not directed at you or any specific person. Rather, it was general in nature. The posts in the thread say more about the posters than the actual topic...IMO, of course. Also , sorry for the $H!T grammar, I need to eat. Dan

Dan, I think what you said was just fine. I was agreeing with you.

Your grammar is fine too.

Always good to hear from you. I do enjoy your posts.

Bob.

bobwest 

I was actually thinking of your journal posts when I wrote this. I was not saying no one uses them, nor that they do or don't work; I was interested in getting some reports of what people are actually using. I don't know one way or another about fibs, and I am pretty agnostic, in a friendly way, toward these and many of the "proportionality" or "ratio" ways of finding or measuring levels. So it's not that I have a problem with any of them in the abstract, it's just that I think it is much more important not to be abstract, but to focus on some real trading experience. Like yours. What works is a lot more important than what does or does not have a good explanation abstractly. (Not that making sense abstractly is not a good thing either.... but I'll take results over explanations any day.) By the way, I don't know if the self-fulfilling prophesy argument is what is actually going on -- that would imply that a lot of people are looking at those levels, which may or may not be true, but which is also kind of hard to check (how would you know how many traders are or are not? Do you take opinion polls? Would anyone tell you? ) As a practical matter, whatever works is what is important, and not everything that works for one trader will work as well for another, for whatever reason. Bob.

@bobwest we're totally on the same page, your post was great! All these posts are fantastic.

I originally had a bunch more I wrote for my earlier post from yesterday with the code, and I removed it because I still don't really feel 100% comfortable with pushing my opinions out there as they're not really tested over long periods of live-trading. But I felt the urge to share that I didn't really consider using them in any mystical sense.

As for the self-fulfilling prophecy, I don't have any hard stats so its up to subjective opinion, but I do often see range-extension which would imply higher-timeframe institutional traders driving price up/down to these fib-levels where support/resistance is met and absorption occurs and it seems pretty common. These levels could be significant for totally different reasons and that is valid, I'm ok with the very real possibility that I drew a significant line accidently and for all the wrong reasons

The big light-bulb moment for me came when I found out I could get a handle on market context in a way that I couldn't before because I was ignorant to a lot of things (still am). That is what matters to me, the precise %s not so much.

anyway that's enough of my hubris for now!

snax 

Well if my questionable experience counts for your definition of "actual experience"... I plot them out every day to map out price areas between prior high-of-day/low-of-day to give myself context and frame-of-reference for where price has been and where it seems to be going. I also map out the extensions as well as stuff like Overnight high/low, prior close,etc. I see price behaving significantly around these fib-levels all the time, perhaps as a sort of self-fulfilling prophecy as someone else put it, or perhaps as sort of checkpoints along the way to more significant levels like yesterday's high or something. I get value out of them, others might not. just my 2 cents! Cheers!

Like anything in trading , fibs work best on longer time frame charts that are trending . monthly , weekly, daily. 240min. Nothing in trading works in a vacum , conflunce with the 50 or 200 MA makes the levals more strong . The 50 % and 61.8 are the ones i use . The fib levels are not the Grate Wall of China , generaly all you can count on is a rotation at the levels . It is nessary to see something that a reversal in price is underway , stop placement , profit targets , and montering the the trade for problems and market conditions is necessary . Trade mangement that includes R to R , postion sizing , the experance to tell if your in a strong move or not are all necessary . Traders that say fibs do not work , can not execute the the above referenced steps correctly . The trader then moves on to the next thing , with no clue that the trade management factors are the most important . if the trade mangement is executed correctly the trader can make most anything work . Sadly no course or mentor can teach trade management , experance and the school of hard knocks is the only teacher . I noticed in all the educational courses I took , this area of the course was very thin or ommited completly . hope it helps