Does Fibonacci really work?

Anyone willing to comment on these statements that I have hearing more and more often these days:?

-You can make an argument that there is a fib trading level at every single bar on the chart. Take any chart, and draw any fib extensions or retracements, (pick a bar, any bar, pick a swing high/low , any swing high/low) and you will see some bar at any given fib level. Fibs will work after the move has been made. The fib trading method does not work during real time trading. On any given chart at any given time frame, there are a million fib levels...If you trade the fibs, you will over trade and chop your account up...

Is there some truth behind this statement? I wish there wasn't, but the more I think about....:(

As you have already mentioned there just seems to be too many fib lines and extensions but the real power in using any of that ( or any method really) comes when we have confluence.

I'm not sure anything works that well in a stand alone environment but when we have fibs. pivots, previous swings and Market profile levels then we have a bunch of traders looking at an area as a target or a reversal zone....at the same time...!!

Of course we all like to take credit for an area on the chart that the market reacted to but the reality usually is that we cannot pinpoint any specific method and give it "credit" as the real reason that an area on the chart acted the way it did...

Doesn't really answer your question specifically but I wouldn't use fibs alone.....too subjective as I wouldn't know where to measure from etc......perhaps if we knew what MOST use to measure swings then we could incorporate that into the plan...

We need to synthesize all these differnt levels to make them usable....using just one method to generate s/r numbers is a ticket to the poor house...!

Boy, if that's true, I guess I just wasted 37,000 hours...

I agree with Bruce, it's all about confluence, what I call synergy. Nothing is of much use to me as a standalone. Another great example are lines, whether horizontal or sloping. I can find a line of some kind for any price level you want. Are lines therefore useless? Far from it. One look at kool's work and it is hard to say Fibs are useless.

I'd suggest you look over the hundreds of free commentary on my website to see how Fibs can be used with other techniques to find synergies. Anyone who says it can't be done in real time hasn't been in my private forum...

Let me add in one more comment. I'm glad a lot of people think Fibs are useless. I'd be worried if everyone said they were the be all and end all, and they loved them. Think about it.

Interesting.

Bruce calls it Confluence.

Jim calls it Synergy.

I call it Cluster Theory.

They're all the same thing. Many "indicators" triggering a reversal at the same price. The logic is obvious. The more indicators triggering at the same price the more traders will be reversing, closing, entering positions based on that anticipated reversal or break out. Self-fulfilling.

MCT, I ve spent the better part of 2 years of my trading life here at mypivots trying to show the 'magic' of fibs! Theres not a day goes by that i dont make some amazing calls.Ask anyone... imho, they are the single most powerful tool a trader can have in his arsenal, and when used properly ,in conjunction with other valid tools (indicators, mp, etc) ,they can be very useful to traders.

my original response at 9:18 mentioned Kool but I couldn't quite get the words out and it got too late......you folks have a way with words far beyond me...but the gist of my original response was this....


"Kool has woked hard and has developed his own twist on fibs that works in real time....I have also noticed they line up quite often with other things but that doesn't diminish the fib work"


so the moral of the story with all this stuff is finding a way that works for you......

I didn't want ya to feel slighted Kool and that is what I was originally intending to say...

JimK also uses Fibs with other methods.....

Some think they are going to buy a pdf for 67 bucks from some vendor and have fibs handed down to them on a silver platter

No offense taken, Bruce. The reason for my testiness is i've often felt most want an easy 'holy grail' for their trading ,so they don't have to put in the required work, to be successful. No other method seems to attract this crowd more, imho. I maintain that fibs are extremely powerful,but that doesn't preclude ,the normal study required. That's how you know which fibs to 'filter ' out and which may be very important. If your not willing to put the time and effort in, then it doesn't matter what method is used, trading becomes ineffective.

My story with respect to Fibonacci is somewhat unique i think. Until I started paying attention to Koolblue right here on the mypivots forum, I was a 100% card carrying anti-Fib agnostic. I spent a good many years absolutely convinced the whole Fib thing was baseless and 100% a con-job from top to bottom. I viewed the application of Fibonacci to market data as a case of wishful thinking meets random price data. My operating premise is as follows: In the market, people tend to see what they believe. If you believe in astrology then you see astrology, Fibonacci ratios then you see them, Gann angles, Elliot Waves, Harmonic's, Octaves, ... and so forth ad nauseum. However, after studying the subject in depth with Koolblue and VO as my mentors, I can say without any reservation, Kool's Fib projections absolutely do work, day in and day out, in real-time, often with stunning accuracy.

Thanks to the exceptional folks like Jim and Kool, that actually figure this stuff out and are willing to teach the rest of us, well at least those of us willing to open our minds up a little and learn something new. Thanks guys

check out this post on another forum , and under another name! shill!... Old 05-23-2010, 11:37 PM
marker is offline marker
marker

Join Date: Mar 2010
Location: Las Vegas
Posts: 19
Thanks: 6
Thanked 2 Times in 2 Posts
Anyone willing to comment on these statements that I have hearing more and more often these days:?

-You can make an argument that there is a fib trading level at every single bar on the chart. Take any chart, and draw any fib extensions or retracements, (pick a bar, any bar, pick a swing high/low , any swing high/low) and you will see some bar at any given fib level. Fibs will work after the move has been made. The fib trading method does not work during real time trading. On any given chart at any given time frame, there are a million fib levels...If you trade the fibs, you will over trade and chop your account up...

Is there some truth behind this statement? I wish there wasn't, but the more I think about....

yes ...he's been in Traders Lab for a week as Marker too posting and searching for answers but who is he a shill for ???? What service ??

I thought the same thing and it would be a fairly elaborate technique....perhaps the plan is to come on here as if on a quest to find a vendor and then finally settle on one...that would be the shill part...I'm not convinced of that yet....he seems fairly objective so far....

Jury's out still for me!!

Bruce, did you notice that yesterday he posted here one of those "hey, has anybody heard of profiletraders.com?"... and yet at traders lab, masquerading as 'Marker' he admits using them for some time! Smells like something you scrape off your shoe if you ask me!..lol

Originally posted by AddictedToTrading

Fibonacci retracements work when the person who is drawing them is aware of the certain rules and methods required to effectively utilize them as a trading tool. The problem is that people often make the mistake of trying "fit" Fibonaccis to what they are seeing in the price action. This method of drawing them will most certainly not yield desirable results. Instead, one must understand when to draw, trade, and delete Fibonaccis as the day goes by. I currently utilize fibonaccis is what is called an "ambush trading" method. When done correctly, Fibonaccis give you a clear picture of what the trend is, where the market is moving, and where the trend fails. The rules take sometime to learn, but once you got the hang of it, fibonaccis can be real money makers.

makes sense indeed....the more I read these comments, the more I am leaning towards learning from eminijunkie...