Proving that Fibonacci retracements have an edge...

[DionysusToast]

1. The markets are a "natural phenomena" driven by human psychology. I find no compelling reason to believe that human psychology is divorced from other observable natural phenomena in any way. Therefor, I have no compelling reason to reject the proposition that market responses can be modeled by the Fibonacci sequence.

What you have described is somthing called "Faith"

2. One can put forward an idea that seems to work and is used by prominent and profitable traders. Just because some here cannot make it work is not pertinent. As I've stated before, a trading system succeeds or fails largely as a consequence to the effectiveness of it's primary component. The primary component is not the strategy, it is the trader.

Ths is true enough. Be careful though about understanding the difference between what people use and what makes them a success.

 

[DionysusToast]

I think I have. You don't agree.

Can you cite in this thread or from any other resource a compelling or even plausible reason to reject it?

Isn't this rather turning things around ?

You mention your background as if this is pertinent but then discuss 'proof' that is purely anecdotal.

You don't need to prove it doesn't work. The burden of proof is on the person providing the theory as it applies to the markets.

I could tell you that a cloud on the horizon smelled like cheese - are you saying that I would be right because you couldn't disprove it ?

Once again, we get back into faith...

 

[wackypete2]

I could tell you that a cloud on the horizon smelled like cheese ...

OOPS, sorry, that was me.
Must be the eggs and beer I had for breakfast this morning.
It'll dissipate shortly....

Peter

 

[HowardCohodas]

What you have described is somthing called "Faith"

Accepting without proof is faith.

Remaining doubtful or noncommittal because proof does not exist, even if anecdotal evidence does exist is agnostic.

 

[HowardCohodas]

Isn't this rather turning things around ?

You mention your background as if this is pertinent but then discuss 'proof' that is purely anecdotal.

You don't need to prove it doesn't work. The burden of proof is on the person providing the theory as it applies to the markets.

I could tell you that a cloud on the horizon smelled like cheese - are you saying that I would be right because you couldn't disprove it ?

Once again, we get back into faith...

See post on faith vs. agnosticism.

 

[DionysusToast]

See post on faith vs. agnosticism.

Howard.

If you added about 30 points onto your IQ, you'd be able to make your argument cohesive.

As it is, you are just making your self look 30 IQ points short of Forrest.

Run, Howard, run.

I eagerly await your cuttingly witty, yet subtle rejoinder.

I am hoping that with my encouragment, you will make it to "full wit" within the next few weeks.

 

[HowardCohodas]

I eagerly await your cuttingly witty, yet subtle rejoinder.

As you wish. "Cuttingly witty, yet subtle rejoinder."

 

[anley]

DionysusToast

If you don't like this board then -

1) why are you here, and
2) as you seem to know everything, see point 1

 

[Shakone]

DionysusToast

If you don't like this board then -

1) why are you here, and
2) as you seem to know everything, see point 1

I think he already mentioned it once. He said his wife forces him to come on here, because if he doesn't, then he acts like he does here to his wife at home. Understandably, she's sick of it (I may have paraphrased you slightly Dionysus). I tend to go to the pub to let off some steam...but I guess some need T2W

 

[DionysusToast]

DionysusToast

If you don't like this board then -

1) why are you here, and
2) as you seem to know everything, see point 1

Shakone's right.

What makes you think I don't like the board ? I'm not anti-T2W. I'm anti idiot.

Fibs work but it takes at least a year to make them work?

Come on Anley - give us a breakdown of this years work. Just for a laugh.

 

[DionysusToast]

As you wish. "Cuttingly witty, yet subtle rejoinder."

Actually - not bad at all... :clap:

 

[DionysusToast]

I think he already mentioned it once. He said his wife forces him to come on here, because if he doesn't, then he acts like he does here to his wife at home. Understandably, she's sick of it (I may have paraphrased you slightly Dionysus). I tend to go to the pub to let off some steam...but I guess some need T2W

I think you have nailed it fairly squarely

 

[bedsit]

He said his wife forces him to come on here, because if he doesn't, then he acts like he does here to his wife at home. Understandably, she's sick of it

Good analysis.:smart:

 

[Dommo]

It amazes me what analyses and theories people will bring to bear, uncritically, when faced with something that resembles brownian motion.

If they work for you, good luck to you.

 

[counter_violent]

I think he already mentioned it once. He said his wife forces him to come on here, because if he doesn't, then he acts like he does here to his wife at home. Understandably, she's sick of it

Is this Truth or a Fib !

 

[anley]

Shakone's right.

What makes you think I don't like the board ? I'm not anti-T2W. I'm anti idiot.

Fibs work but it takes at least a year to make them work?

Come on Anley - give us a breakdown of this years work. Just for a laugh.

Re the year - it took my mate a year before he could properly fly a helicopter. And if you use some common sense you'll realise that THROUGHOUT that year he WAS flying helicopters. Learning while flying if you will.

Same with learning Fib or any other indicators, your LEARN while you TRADE and you trade with REAL MONEY as dummy money is a waste of time. But how much money do you trade with, only small amounts so losses and mistakes which there will be plenty can be kept to a minimum (investment in your education if you will).

So back to the year, why a year? Simple because you've got to know and understand the subtleties of an indicator and that cannot be done in a few months or over a weekend. They'll naively think 'oh, it didn't work and I'm pissed off I lost money' when the correct attitude for someone who's done his homework and been trained properly will say 'oh, that's interesting and potentially dynamite information - major Fib support failed, I should be able to use this information profitably for the next few trading sessions and because of my hard earned understanding of the markets in relation to Fib theory I know EXACTLY how to play this sort of move'.

So you've got to know for example when to trust your indicators and when not to as pattern failures for a good trader should make him a tonne of money. Somebody learning about Fib over a weekend won't have a clue about any sort of pattern failure and how to correctly play it.

I stand by what I say, if you want to get good with any technical indicator you're foolish if you think you can do it in less than a year. Like I said it's all about learning and the interpretation the subtleties.

Having said that, if you think you can learn something complex in a few days and be able to compete for the SAME profits as others who've taken years to perfect their craft then please you're very welcome to use your knowledge against ours (I'll be shorting your 'strong .382 support' at the precise time it's likely to fail).

I'm in the markets all the time and love shooting fish in a barrel.............

 

[Splitlink]

Statistically, a fib line is as effective as any other. Though why thinking people consider a 23,6% reversal from a high/low is beyond me but, still, it takes all types. My own ideas would fetch just as much scepticism as fibs do. I use statistics a lot as, probably, most of us do, but mine do not circulate around a fixed group of percentages, as fib lines do.

 

[bedsit]

Hi Splitlink.

It’s understandable people want to know why. IMO It’s similar to spending days no end contemplating the meaning of life without doing anything else.

I guess it’s something to do with statistics as you rightly pointed - if certain things keep repeating 80% of the time, traders tend to use that information for their trading decisions in order to make profit.

Why 23.6% - because statistically its proven for the price to retrace 76.4% (100 - 23.6) for one currency pair (the last point of a possible reversal), whereas for some other pairs 61.8 is the maximum. So all this information can be used to trade profitably.

There are lot of other details one needs to be aware of, different ways to use it and I agree with Anley - it takes a bit longer than few days to learn how to use it properly (a good helicopter flying example)



PS The example I posted earlier is based on Elliott wave principle (seeing trends as a series of price waves)

 

[Splitlink]

Hi Splitlink.

It’s understandable people want to know why. IMO It’s similar to spending days no end contemplating the meaning of life without doing anything else.

I guess it’s something to do with statistics as you rightly pointed - if certain things keep repeating 80% of the time, traders tend to use that information for their trading decisions in order to make profit.

Why 23.6% - because statistically its proven for the price to retrace 76.4% (100 - 23.6) for one currency pair (the last point of a possible reversal), whereas for some other pairs 61.8 is the maximum. So all this information can be used to trade profitably.

There are lot of other details one needs to be aware of, different ways to use it and I agree with Anley - it takes a bit longer than few days to learn how to use it properly (a good helicopter flying example)



PS The example I posted earlier is based on Elliott wave principle (seeing trends as a series of price waves)

Is that, really, proven? Fibonachi was not thinking of markets when he discovered his theory. All he was doing was pondering over the reproduction of rabbits, or whatever monks pondered over in those days. I suggest that your Elliot wave principle is far better suited to the markets because it is, actually, based on market study--not adapted from some other source ( and I don't believe in Elliot Wave, either).

I have not come out too badly in not believing in any of this, which goes to show that the whole thing is a very personal way of doing things. There are some who believe in astrology. If they are successful at it, who are we to say it is nonsense?

Why 23.6%? Because this is a number thrown up over Heaven knows how long a period and the more examples that there are, the more accurate it is going to be.

That is the theory. In fact, in practical terms it is nonsense. The turning point in which you are interested will probably be very different from where it,actually, occurs and yet, when it it is added to the thousands of previous examples it will fall near enough to be valid.

 

[Splitlink]

Hi Splitlink.

It’s understandable people want to know why. IMO It’s similar to spending days no end contemplating the meaning of life without doing anything else.

I guess it’s something to do with statistics as you rightly pointed - if certain things keep repeating 80% of the time, traders tend to use that information for their trading decisions in order to make profit.

Why 23.6% - because statistically its proven for the price to retrace 76.4% (100 - 23.6) for one currency pair (the last point of a possible reversal), whereas for some other pairs 61.8 is the maximum. So all this information can be used to trade profitably.

There are lot of other details one needs to be aware of, different ways to use it and I agree with Anley - it takes a bit longer than few days to learn how to use it properly (a good helicopter flying example)



PS The example I posted earlier is based on Elliott wave principle (seeing trends as a series of price waves)

Is that, really, proven? Fibonachi was not thinking of markets when he discovered his theory. All he was doing was pondering over the reproduction of rabbits, or whatever monks pondered over in those days. I suggest that your Elliot wave principle is far better suited to the markets because it is, actually, based on market study--not adapted from some other source ( and I don't believe in Elliot Wave, either).

I have not come out too badly in not believing in any of this, which goes to show that the whole thing is a very personal way of doing things. There are some who believe in astrology. If they are successful at it, who are we to say it is nonsense?

Why 23.6%? Because this is a number thrown up over Heaven knows how long a period and the more examples that there are, the more accurate it is going to be.

That is the theory. In fact, in practical terms it is nonsense. The turning point in which you are interested will probably be very different from where it,actually, occurs and yet, when it it is added to the thousands of previous examples it will fall near enough to be valid.