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

  #251 (permalink)
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tigertrader View Post
like i said, how many times has it gotten you out of a trade prematurely vs the optimal exploitation of the trade?


do you have any idea if it has had a positive or adverse effect on your expectancy?

I have a saying (same as others) - ' If it ain't broke, don't fix it'.

If you are profitable using Fibs, then do not listen to anyone. Keep doing what you do.

I personally cannot make Fibs work for me, but if you can, keep doing so.

TT is the best trader on this forum, but he is not the only successful one here. He can keep a trade going for a month. I am happy to have a trade for 30 minutes. Others have their own edge. Mine is taking small profits. It suits my personality, but won't suit others.

Find your edge and stick to it, and don't be put off by others.

Here is a chart to whet your appetite

Dudley

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  #252 (permalink)
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Seahn View Post
No offense intended because I believe people are free and deserve to trade the way they want. All that matters in the end is making money at it.

But,

Do you really believe that the trillions of dollars, and the countless number of people behind those dollars in the market represented by that chart are governed by some numerical ratios that occur in nature because they are the lowest energy way to grow organic structures?

Do you believe that back in 2007 on that chart market players big enough to move the market said to themselves "I am going to sell when price reaches the 161.8 extension"?

Sorry but in my mind it just does not add up.....

No offense taken and thanks for the friendly manner. My straight answer to you is NO, I DO NOT BELIEVE that in 2007 the big players thought that.

Let me be straight. I myself am not convinced 100% that fibs work. My problem is that I have taken the time to play with these tools and understand them, and the same ratios keep coming up. At some point I cannot keep dismissing it as a "coincidence". I am aware of the pitfalls of confirmation bias and have tried to use a specific set of rules to draw them.

At any rate, IF fibs do work, I do not believe it is because of some self-fulfilling prophecy, or that its because the big guys all use them on an individual basis. @tigertrader tells me they don't and I believe him. (Although I wouldn't be surprised if one or two big players keeps some fibs in his closet and is too ashamed to admit it

Rather, it would be more in line with patterns created by a critical mass of people, big and small, on a collective basis, not on an individual one.

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  #253 (permalink)
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supermht View Post
those fib levels r random lines, we can draw many different lines and give them "holy grail"names...

Does market's move follow those number?
answer is NO !

Honestly, would you be convinced by this argument? Just saying something is random and moving on is not enough for me. Nothing personal and I'm not saying your wrong in the end...

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  #254 (permalink)
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tigertrader View Post
Indeed @Seahn! Could you see George Soros staring at a chart of the British Pound in 1992 as he was getting ready to short the market and "break the bank of england"? (sarcastically) sure, i can see him saying, "stan, i want you to short the fuck out of the pound, but not until you have a fib to sell it against!" the irony of this entire discourse, is it would never be found on a forum that consisted of professional traders. it would be like a bunch of rich guys getting together, and discussing what it would be like to be poor. it just doesn't happen. you'll see a bunch of poor cats fantasizing about what it's like to be rich, but not the other way around. i remember victor once writing, One finds it very dysfunctional to lose my temper on all occasions, but especially when trading or with the children. It could even lead to tilt. So forgive me if I don't mount the high horse in my disapproval of talk about Fibonacci and Elliott wave and Gann waves on the spec list as our raison d'etre is almost as antithetical to such things as it is to politics, religion, and honeys (may they never meet).

all these charts are meaningless and only serve to highlight the the difference between prior and and posterior probability. to quote wikipedia...

In Bayesian statistical inference, a prior probability distribution, often simply called the prior, of an uncertain quantity is the probability distribution that would express one's beliefs about this quantity before some evidence is taken into account

the posterior probability of a random event or an uncertain proposition is the conditional probability that is assigned after the relevant evidence or background is taken into account.


yes, it's true that the market does go from a to b and then pulls back to c and goes on to move back to b and beyond. and sometimes c even turns out to be a fib. the question is not if this phenomena occurs, but with what probability does it occur, and what is the probability of having an extreme and sustained change in the market-trend, given you have this pull-back.

there is no theoretical basis to believe that fibonacci support and resistance levels hold any validity for traders. so the only possible rationale might be that one finds that they work empirically. to date no such credible evidence has ever been seen.

single signals and other linear, uni-variate input leave the trader with a simple binary bet, with no opportunity to act on new information. it does not provide quick feedback in order to alert one if the trade is valid or not, nor does it assist the trader in generating asymmetric payoffs or a high expectancy.

if one was to ask himself, does the source of this edge make sense, or is there a structural, behavioral, or fundamental reason why the source of this signal should persist, i think the answer would be "i don't know".

Somewhere way back when, and I will find the link, just before you were going to meet "The Palindrome" aka Soros, I pointed to a series of videos where Soros himself outlined his philosophy. Interestingly enough, the basis of his philosophy had nothing to do with "correlations" so to speak. It had to do with the fact that he made his money betting against the fact that the market was "rational" and "efficient". Rather, he felt it was ruled by emotion and prone to mis-pricing. He developed his own theory on bubbles and how to make money off of them. At its heart, his trading was based on understanding human psychology on a collective basis.

IF fibs works, it MAY BE that they work somewhere along the lines of collective patterns of human psychology and critical mass as well. At least that is my interest in them.

Certainly, Soros has at least proven that trying to mine that vein is not a fool's errand. Of course, I am not him, and will probably not succeed like he did, but, hey, it doesn't hurt to prospect a little.

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  #255 (permalink)
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mrmuggins View Post
I have a saying (same as others) - ' If it ain't broke, don't fix it'.

If you are profitable using Fibs, then do not listen to anyone. Keep doing what you do.

I personally cannot make Fibs work for me, but if you can, keep doing so.

TT is the best trader on this forum, but he is not the only successful one here. He can keep a trade going for a month. I am happy to have a trade for 30 minutes. Others have their own edge. Mine is taking small profits. It suits my personality, but won't suit others.

Find your edge and stick to it, and don't be put off by others.

Here is a chart to whet your appetite

Dudley

Thanks Dudley,

I certainly applaud you for creating your own system, following it, and making it work for you. More people should pay attention!

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  #256 (permalink)
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  #257 (permalink)
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srgtroy View Post
Honestly, would you be convinced by this argument? Just saying something is random and moving on is not enough for me. Nothing personal and I'm not saying your wrong in the end...

@srgtroy

Totally agree with you. Too many people on here think that lines are random, but if they have meaning for you, then they are not random.

If you can make sense from Fibs ( or any other lines on your chart), then they have a meaning and are not random.

Whatever your edge, keep doing it and do not listen to anyone one that say you can't.

I like drawing lines on my chart as they have meaning to me. However, too many people on FIO (formerly BMT) will see them as 'Random', because they have no meaning to them. And they then tell you that you are stupid to think that these lines are useful.

Anyway, thanks, for helping me with my aggressor bar indicator.

Here are another couple of charts from the previous 2 days with lines that have meaning to me.

Regards,

Dudley

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Are Fibonacci retracements and projections useful?-es-12-15-1-min-05_11_2015_fio.png   Are Fibonacci retracements and projections useful?-es-12-15-1-min-04_11_2015_fio.png  

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  #258 (permalink)
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tigertrader View Post
like i said, how many times has it gotten you out of a trade prematurely vs the optimal exploitation of the trade?


do you have any idea if it has had a positive or adverse effect on your expectancy?

For long time I didn't know how to close a position, so most of the time I was early on my exit, but since I use the Fib extension, it help me to stay longer on the trade.

When I saw a retracement but not enough to tell me the trend is over I will stay on the trade until it reach the fib extension, most of the time they reach those number so I scale out a portion of my entry and put my next target at the second extension.

So for me it more positive and force me to not take my profit to soon...

so to make a quick explanation, when the price break the 100 fib, I will put my first target at the 127,2
and the second at the 161,8...

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  #259 (permalink)
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i hope my comments are not misconstrued as pretentious nor disputatious, rather than

an attempt to provoke thought.

as a leveraged trader, one makes short-term decisions/trades, manages the risk/ keeps draw-downs to manageable levels and occasionally turns short-term winning positions into longer ones. that being said, the market and its past is identical for all observers. yet, the market and the future are understood uniquely by each trader. no matter how crude or refined a method one follows in ascertaining the likelihood of change, it still boils down to surviving against one's own incomplete intellect, a misfired bout of randomness, in controlling the risk, and in executing a set of consistent ideas day in and day out, so that chance can prevail. drilling down further, the end game is still about making the most money with the least cost. so, it's not how often you're right, but how much you're right. if you want to make money and do this for a living, then asymmetric payoffs and maximizing geometric returns should be front and center in your thinking.

there are a number of "leaps" one must make in their progression as a trader, and none is greater than the transition from "hobbyist" to "professional" i define professional trader as a trader who is able to live off of his p&l and continue to scale his account. trading takes on a new meaning and presents a vast new challenge when it becomes your sole source of income. so while discussions like these may be intellectually stimulating, they are of a tertiary concern at best, when it comes to maximizing your chances of becoming a professional trader.


Last edited by tigertrader; November 8th, 2015 at 01:59 PM.
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  #260 (permalink)
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tigertrader View Post
an attempt to provoke thought.

as a leveraged trader, one makes short-term decisions/trades, manages the risk/ keeps draw-downs to manageable levels and occasionally turns short-term winning positions into longer ones. that being said, the market and its past is identical for all observers. yet, the market and the future are understood uniquely by each trader. no matter how crude or refined a method one follows in ascertaining the likelihood of change, it still boils down to surviving against one's own incomplete intellect, a misfired bout of randomness, in controlling the risk, and in executing a set of consistent ideas day in and day out, so that chance can prevail. drilling down further, the end game is still about making the most money with the least cost. so, it's not how often you're right, but how much you're right. if you want to make money and do this for a living, then asymmetric payoffs and maximizing geometric returns should be front and center in your thinking.

there are a number of "leaps" one must make in their progression as a trader, and none is greater than the transition from "hobbyist" to "professional" i define professional trader as a trader who is able to live off of his p&l and continue to scale his account. trading takes on a new meaning and presents a vast new challenge when it becomes your sole source of income. so while the discussions like these may be intellectually stimulating. they are of a tertiary concern at best, when it comes to maximizing your chances of becoming a professional trader.

Well said, in every respect.

Bob.

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