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

  #301 (permalink)
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srgtroy View Post
So price made it up through that major confluence at 2038-2040 to 2050. My expectation would be a pullback/retest of the confluence around 2038-40 which should represent a good place to try to get in on a long. Let's see if that works...

current position...

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  #302 (permalink)
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I think that the main question is the question which timeframe you trade.

the market isn't (necessarily) going to accommodate the trader's time-frame, style, or methodology. if and when it does, it is by random luck. the trader needs to "custom fit" his approach to the market, in such a way that it affords the trader the highest probability of making the most amount of money. if a trader chooses to "pigeon-hole" himself and adopt a single approach, style, or timeframe than he is severely limiting his potential profitability.

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  #303 (permalink)
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tigertrader View Post
if a trader chooses to "pigeon-hole" himself and adopt a single approach, style, or timeframe than he is severely limiting his potential profitability.

This is one of the biggest things I have learned this year...

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  #304 (permalink)
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tigertrader View Post
current position...

Attachment 197778

Nice. I wasn't around for Monday's action but can't guarantee I would've gone long anyway. At least I did say take some profits on your ES short around 2000 on Sunday. Still, you got in at a sweet price Monday, especially if this turns out to be a nice swing long...


Last edited by srgtroy; November 16th, 2015 at 07:47 PM.
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  #305 (permalink)
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tturner86 View Post
This is one of the biggest things I have learned this year...

Which is why I have one other kind of fib system and two non-fib systems as well I'm just trying to figure out which one works the best...

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  #306 (permalink)
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srgtroy View Post
So price made it up through that major confluence at 2038-2040 to 2050. My expectation would be a pullback/retest of the confluence around 2038-40 which should represent a good place to try to get in on a long. Let's see if that works...

the very nature of "risk" means more things "can" happen than "will" happen; unlikely things "will" happen-and likely things "will fail" to happen. this underscores the difference between probability and outcome. that being said @srgtroy, even though many things can happen, only one will.

possible outcomes are:

1) market may continue to rally without pulling back to 38-40

2)market may pull back further than 38-40, and still be good

3) market may pullback and may actually be a reversal

4) market may not pull back and just keep going higher

5) market may become range bound (go sideways)

6) and all the variations thereof based on different duration's of the move and levels reached in respective directions

of course, these are all possible outcomes, and because they are prior probabilities, we really don't know how likely any one outcome is over the other

and, even if we did know the posterior probabilities, it doesn't mean we know (for sure) what's going to happen

now, i'm sure you will respond by saying, that this happens all the time. the market pulls back to the 38.20 fib level and holds, and goes on to move higher. but of course, it also doesn't make it that far, and goes on to move higher, and it also pulls back to that level and keeps on going right through it. just as in my many examples above, many things could have happened (in each case) in the past, but the fact is that only one actually did happen. this underscores the potential for variability that existed in the past and always exists in the future.

so the fact that you're telling me that your "expectation would be a pullback/retest of the confluence around 2038-40 represents a good place to try to get in on a long" really doesn't mean much to me in way of a substantive process for trading. what it tells me is that you are "hoping" the market pulls back and you get a chance to get long, if the market were still to be good, of course. there is nothing in that analysis to suggest anything more than wishful thinking, and perhaps the desire for a second chance at a missed opportunity.

as i stated in spoo-nalysis today, traders are often afraid to buy strength because it feels like they're paying up and not getting a deal. if the market is going up and you think you should be long, then you should buy it when the market is strong, and not wait for a retracement. buying on a retracement is "psychologically seductive" because you feel you are getting a bargain versus the price you saw awhile ago(anchoring bias). however, if the market retraced enough to make a significant difference in your purchase price, then the trade may not be as good, because the trend may not be as strong as it once was. although, buying weakness may still work, there's an enhanced chance the trend is turning. another shortcoming of waiting for a pullback to buy in a STRONG uptrend, is that you will either miss the move entirely, or pay-up even higher than you could have paid initially. in strong trending markets buying on a retracement really doesn't offer the benefit of increased profits or reduced risk.

fib levels give you a reason to hope for a pullback, which can cause you to miss moves, and they provide you with an excuse to get out of winning trades prematurely. they inspire linear thinking and binary bets, based on hope rather than critical thinking based on reason and a creative interpretation of fundamentals, sentiment , momentum, and the situational context of the market.


Last edited by tigertrader; November 17th, 2015 at 06:14 AM.
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  #307 (permalink)
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srgtroy View Post
Nice. I wasn't around for Monday's action but can't guarantee I would've gone long anyway. At least I did say take some profits on your ES short around 2000 on Sunday. Still, you got in at a sweet price Monday, especially if this turns out to be a nice swing long...

i covered 1/2 my short es position below 2000 and then added on the rally, which i subsequently scratched last night. and, then flipped long, this a.m.

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  #308 (permalink)
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tigertrader View Post

fib levels give you a reason to hope for a pullback, which can cause you to miss moves, and they provide you with an excuse to get out of winning trades prematurely. they inspire linear thinking based on hope rather than critical thinking based on reason and a creative interpretation of fundamentals, sentiment , momentum, and the situational context of the market.

This is a giant extrapolation...and can be said about any system...poc, vwap, correlations, etc...

But I probably should not have talked about my expectation, although, everybody, including yourself, often mention levels they are looking at and watching which they perceive to be significant. That is just human nature. The truth is, these levels are the structure, but it is important to see what price does at them, and so it is really impossible to know what is going to happen, only what you should do WHEN you realize that SOMETHING is happening. I wasn't there today, and I am not here everyday right now, which is partially why I'm not trading.

I was actually going to hold off posting about fibs until I re-started trading and put my money where my mouth was, but, then this thread opened up and while I tried to stay away, it persisted so I took a look.

I would actually prefer to play this game when I'm actually trading and in real-time...anyway, I guess we can see how this week plays out at least...

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  #309 (permalink)
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srgtroy View Post
This is a giant extrapolation...and can be said about any system...poc, vwap, correlations, etc...

But I probably should not have talked about my expectation, although, everybody, including yourself, often mention levels they are looking at and watching which they perceive to be significant. That is just human nature. The truth is, these levels are the structure, but it is important to see what price does at them, and so it is really impossible to know what is going to happen, only what you should do WHEN you realize that SOMETHING is happening. I wasn't there today, and I am not here everyday right now, which is partially why I'm not trading.

I was actually going to hold off posting about fibs until I re-started trading and put my money where my mouth was, but, then this thread opened up and while I tried to stay away, it persisted so I took a look.

I would actually prefer to play this game when I'm actually trading and in real-time...anyway, I guess we can see how this week plays out at least...

poc ,vwap, and correlations are not systems in of themselves. anyone that uses a system solely based on their( poc, vwap, correlations) relationship to price, will find it very difficult to be consistently profitable. this is the giant point i am trying to make.

fact is, markets are inextricably correlated. the degree to which they are correlated varies, based on the inherent stress that exists in the market eco-system. cross-asset relationships are dynamic i.e., in a constant state of flux, not only based on the co-directionality of the moves, but also based on the magnitude of the moves. my interpretation of these relationships provides a multi-variate input which not only aids in providing a forward-looking view and the necessary feedback for confirmation or refutation of the move, but also as a method for either adding risk and potential greater profit or a mitigation of risk through diversification.


Last edited by tigertrader; November 16th, 2015 at 09:48 PM.
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  #310 (permalink)
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There is zero doubt that you are consistently profitable using your "system". I honestly have not seen a single other person on this forum able to replicate this consistency using inter-market relationships, and you have been showing them "how" for years now. There are probably a decent amount of people parroting your trades, but unfortunately, I think that leads to a lot of parroting in general. I don't know how many times I've heard "Yen looks strong" or "xxx is diverging" without any specific quantitative method of assessing the situation or arriving at a go/nogo decision, and where that decision should be effected.

I am inclined to believe you that money flow drives price because that makes sense. I also think it is EXCEEDINGLY difficult to truly understand how the money is actually flowing AND to translate it into actionable signals, especially in the short term. Maybe after 30 years of watching the market, but I don't have that much time to wait. You are the only person I have seen do that consistently and I'm still not really sure how you do it, and apparently, neither are most others. At any rate, I don't think that inter-market relationships and fibs are really at odds. For me, its possible that money flow can be the why, and fibs can be the how. They can work at different levels. There are still things about fibs that I haven't figured out. But I've seen price respect them enough that I cannot ignore them.

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