Maybe I shouldn't be the one to answer this, because I'm not, strictly speaking, a "Fibonacci supporter." (Not an opponent either, strictly speaking.) But I think it is a good question, and I'm not sure that there is an answer that holds for all fibs that anyone may draw.
But, if there are any points or levels that many fib-users are likely to agree on, then the self-fulfilling idea could work for those levels.
As it turns out, @Fat Tails has some of the "ana" indicators that include fib ratios, I believe from the prior day's range. I think that qualifies as a range that is visible to all traders equally, and if you did fib retracements on them, you would get the same lines, no matter what kind of chart you used.
Is this a valid case? Well, if it works it is.
In the same vein, you could say that the major moves in a given timeframe, say intraday, are not that different for most traders, but now things are getting harder to nail down. In fact, the timeframe even of the chart does matter at that point, so it becomes less likely that a lot of fib-drawers see it the same way, and less likely that enough people act on them the same way to really make a difference. You could also ask whether the major participants in the market are using fibs, and the answer really has to be no. So there may never be enough trades based on them to influence prices anyway.
Let's also note that probably most of the traders who use fibs may not do so because they think they are a "self-fulfilling prophesy" -- that is an explanation added after the fact, to try to make sense of it.
Not having an explanation does not mean that it isn't true, however. I think that we're back to the "try it and see" stage, and use it if it works for you, skip it if it doesn't....
Or, read again what @Big Mike wrote about providing context for good traders to make trading decisions, even though the lines, in that view, may not really mean anything. That's basically the idea that the trader is more important than the chart. That's hard to accept, but it may also be right. Whatever works....
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Based on timeframe longer-term timeframes have more significance and least significance for shorter periods. So the fib lines are different for each user. Even without fibs everyones trading their own timeframes.
i think this is starting to become a question of why as opposed to how (at least for me it is).
most answers defending fibonacci methods end up simply being how they are traded. trading fib levels is the same as trading any other sort of level. so many traders are lined up to enter the market and the level works, if they dont the level could break. thats fine, thats the how and i get it. we can trade them profitably by how we manage our position once we're in.
but why use fibonacci to forecast these levels when it seems they only work by coincidence? why try to forecast market levels at all, especially using something as subjective as fibonacci's? why do they work? at least with traditional s/r trading the market is creating these levels for you.
i dont want it quantified as i understand that'd be quite difficult to do (if at all). but can we rationally explain why they work without resorting to the "self fulfilling prophecy" argument?
thats my point. all fib lines are different for each user so why are they important/useful.
Many fib users go by the idea that the market has inherent proportions that cause price to conform to the fib ratios. Or, that there is something to do with human nature, crowd psychology or mass behavior, that follows the structure of these ratios or that is dictated by them.
Any of that may be true, but it appears to take a leap to get there.
I always go back to the practicality argument: if something works reliably, I'm for it. If not, I'll pass on (as I have passed on from fibs.) I also think that someone else can sometimes use something that I cannot. I also know that I don't know everything.
But if you want a good, solid, "rational" explanation, you may wait a long time for it.
Which doesn't mean there is none. I just don't really know one.
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To put it another way, money talks, bullshit walks. The burden of proof rests on the fib proponents.
I wonder how many of the fib advocates actually trade live, how many are profitable, how many of them support themselves solely from their trading income, or even how many of them would be willing to provide an example a priori instead of after-the-fact. Show me that using a strategy based on the use of fibs has a high expectancy, is scaleable, and makes me mucho dinero, and I will be a believer. Because, in all my years trading, I have yet to come across a consistently highly profitable trader who bases his methodology on fibs.
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