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Are Fibonacci retracements and projections useful?
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Are Fibonacci retracements and projections useful?

  #191 (permalink)
Market Wizard
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Hey @ratfink, but tell us what you really think.

But seriously, I voted "no" because I haven't had consistent success over a fairly long period of trying them, and eventually I decided I would just pass on to other pastures. I would note that, as I mentioned in my first post in this thread, to many it's almost a theological question, either way -- which, inevitably, cannot ever be resolved due to different religious preferences, and the rigidities they cause.

I do believe I was partly wrong on that point, and quite a few who posted here were open-minded, on both sides, although I'm not sure how many minds were changed. I also thought it got fairly well-discussed, although, again, not to the point of any real resolution, which may be where we end up leaving it.

I think that the basic facts of the case are that people give them a try, find they can use them or that they can't, and that pretty much decides their viewpoint after that, including their view on the "quantifiable" question. (I still owe Grimes a read, and he may or may not change my opinion. However, I am a little lazy about mathematics, so I haven't given it a read yet.) Essentially, if someone is having success with them, that person won't care too much about someone else's view that they don't work, nor should he. And it goes the other way too, if the person had no success with them. So we are kind of stuck there.

I certainly do go along with, and appreciate, this:


ratfink View Post
Yes, because on a forum where we are taught that all traders need to find themselves and their own methods the double standards used in some debates are unfortunate. More open-mindedness would be appreciated.

I liked the rest of your post too, including the parts that I couldn't understand (). Just kidding about that last part.

Anyway, we all have our views, and the main thing really is not who can beat whom in a basically valueless internet debate, it's whether the person can use them in trading the market. But, to the degree that this was a discussion by well-meaning people who disagree, which it was to a certain extent, it did have some value. At least some good questions were raised and talked about, or so I believe.

I do wish you had weighed in earlier, but I think we are all getting fatigued about the question now.

By the way, I tried to view your graphic, but the image didn't expand at all. Can you repost?

Thanks.

Bob.

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  #192 (permalink)
Market Wizard
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cogito View Post
@ratfink the chart you posted is too small to read.

Thanks, dumb-ass posted an old thumbnail back, should be fixed now.

Travel Well
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  #193 (permalink)
Market Wizard
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bobwest View Post
Hey @ratfink, but tell us what you really think.

Well, technically I should have voted 'No' to the poll because of the 'quantifiable' word, but I answered 'Yes' to the title of the thread.

I should also make it clear that my view of quantifiable is probably quite different to others. Quantifying a given method over a period of time is in reality just a backtest, which in my view has utility (and I greatly admire the profitable users of such) but is overrated. It has little bearing on whether a given model is correct, although obviously it might provide supporting evidence.

Anyway, I too have had much to learn from the other side of the camp, including the fact that rude-awakenings have their place. I mean, seriously, I even have a bloody VWAP visible now.

Here's to good trading and exchange of all sorts.

Cheers

Travel Well
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  #194 (permalink)
Market Wizard
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ratfink View Post
Well, technically I should have voted 'No' to the poll because of the 'quantifiable' word, but I answered 'Yes' to the title of the thread.

I should also make it clear that my view of quantifiable is probably quite different to others. Quantifying a given method over a period of time is in reality just a backtest, which in my view has utility (and I greatly admire the profitable users of such) but is overrated. It has little bearing on whether a given model is correct, although obviously it might provide supporting evidence.

Anyway, I too have had much to learn from the other side of the camp, including the fact that rude-awakenings have their place. I mean, seriously, I even have a bloody VWAP visible now.

Here's to good trading and exchange of all sorts.

Cheers

I had/have much the same view about quantification, both pro and con. In fact, that was one of the reasons I had to vote no.

Funny how we can learn some stuff we never thought about on our own....

Bob.

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  #195 (permalink)
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TheTradeSlinger View Post
Anybody that voted yes going to quantify the usefulness of fibs?

Don't hold your breath. It's far easier to post lengthy arguments exposing the wonders of fibs and hindsight charts. Yet when Big Mike asks when someone is going to post their live performance using fibs,...there is an eery silence. Mike put his money where his mouth is for 6 months posting live trades and brokerage statements. All the fib lovers have posted is a bunch of magical random lines.

It's very fortunate that if a fib line fails,...there's another one a few ticks away waiting to take credit.

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  #196 (permalink)
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Fibs are just a way of life, it's a lifestyle

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  #197 (permalink)
Market Wizard
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DarkPoolTrading View Post
Don't hold your breath. It's far easier to post lengthy arguments exposing the wonders of fibs and hindsight charts. Yet when Big Mike asks when someone is going to post their live performance using fibs,...there is an eery silence. Mike put his money where his mouth is for 6 months posting live trades and brokerage statements. All the fib lovers have posted is a bunch of magical random lines.

Just to make sure I'm not missing anything here, are you currently using any quantifed methods that BM used, are you successful and have you posted any results?

I greatly admire what Mike achieved and does for us but my own analysis of his trading was that the risk-reward and frequent carried risks of his methods made it unsuitable for anyone without a large account.

To his credit he advises us to start somewhere else where account size is more suitable, but I'm not actually aware of any quantified method of any type that is posted on the forum. Plenty of results and plenty of methods and plenty of trades but rarely all hand in hand in the quantified manner that seems be be being demanded of the lowly Fib user.

I also posted live trades for 3 months. I achieved a 20X cash return with 177 trades. They were utterly unquantifiable rubbish trades. Luckily I blew it up, my head exploded and I'm trying to get better.



DarkPoolTrading View Post
It's very fortunate that if a fib line fails,...there's another one a few ticks away waiting to take credit.

I tried to explain why that might be, I'm sorry that I wasn't able to.

Travel Well
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  #198 (permalink)
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I have a question for the Fibonacci supporters.

So far what i've seen as the only rational argument to support the idea that fib levels work is that they are a self-fulfilling prophecy. To me that simply means that if enough people are looking at making the same trades, buying or selling will flow into the market to support a fib price level and therefore, fibs work.

my question is, how are fibonacci levels a "self-fulfilling prophecy" type of trade if so many traders trade different timeframes, use different charting techniques, count waves differently, and therefore will find different fibonacci price levels to use. if so few people know how to "draw the lines or count the waves correctly" then how is it that these concepts even work?

this is meant to be an honest question, im not attacking those who use fibs.

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  #199 (permalink)
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RielA View Post
my question is, how are fibonacci levels a "self-fulfilling prophecy" type of trade if so many traders trade different timeframes, use different charting techniques, count waves differently, and therefore will find different fibonacci price levels to use. if so few people know how to "draw the lines or count the waves correctly" then how is it that these concepts even work?

It's because one mans fib exit is another fib users entry. Fib lines overlap each other in many ways and timeframes.

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  #200 (permalink)
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hurleydood View Post
It's because one mans fib exit is another fib users entry. Fib lines overlap each other in many ways and timeframes.

im not sure that really answers my question, perhaps you can explain that further. because if that is the case as you claim then we're all looking at our charts the same way still. they may overlap across timeframes as you analyze them, but thats because you'd look at fibs the same way on each timeframe. that is probably not the case when considering other traders.

or if you're saying that fib levels for every player in the market occur over many different prices; then all these levels are spread out and they have no individual significance.

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