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Ken,
I didn't explain the usual Fib pattern since it is easily available.
The question is the same : Why not 0.382, why not 0.500, why yes the
0.618. If you have already two Long positions at 0.382 AND 0.50,
would you keep on buying the 0.618 ? The bad news is that there is NO
priority rule, all levels are equally probable [this is the wrong use
of the statistics, 0.382 WAS perfect 3 months ago but 1.61 WAS true
gold 9 months ago etc etc].
Note also that we speak for emotional trading in front of 0.618 [with
0.382 AND 0.50 already false]. Is this 0.618 the only emotional
factor this specific day? Certainly not. Some INTC would announce
results [loosing -2.5% one h before the announcement...], some OPEC
meeting is ready to decide, your cash flow is not in the best
condition etc. I hope you know the situation and you will probably
agree with my hesitations.
Dimitris Tsokakis
--- In amibroker@xxxxxxxxxxxxxxx, "Ken Close" <closeks@xxxx> wrote:
> Dimitris:
>
>
>
> Hello: thanks for this unique code, innovative and interesting as
is
> most of your postings.
>
>
>
> I am not criticizing your observations but I would make my own
> observation that the reversal at D in your diagram is almost
exactly at
> the 0.618 retracement of the STRAIGHT support fib lines drawn from a
> bottom at you're a to the top at C. This does not in any way
invalidate
> your observations, and I myself would not make a buy on the day a
bar
> hits one of the fib ratios, but would it be possibly true that
hitting a
> more traditional "STRAIGHT" support fib retracement ratio could be
> considered a SETUP and then if the next x bars (say three) are up,
or a
> very short EMA of price turns up, then that could be confirmation
and
> one could enter then with more confidence?? Is it not a
possibility?
> Further, the weekly chart shows that the very same low is 38.2% fib
> retracement from the low on 5/2/2003 to the same "C" top on
4/15/2004.
> I believe it is "common" knowledge among those who use these setups
that
> the probabilities are higher when different time frame reversals
occur
> at common fib retracement levels.
>
>
>
> Thanks again for your innovative coding.
>
>
>
> Ken
>
>
>
> -----Original Message-----
> From: Dimitris Tsokakis [mailto:TSOKAKIS@x...]
> Sent: Saturday, June 12, 2004 11:58 AM
> To: amibroker@xxxxxxxxxxxxxxx
> Subject: [amibroker] Fib solutions vs the tough market decisions
>
>
>
> Many [and potential] foreign traders preferred the TokyoSE the last
> months.
>
> After a prolonged uptrend, the big boys [not the crowd !!] decided
to
> apply severe pressure [C]
>
> The index was loosing -2% or -3% or -5% without any serious
resistance.
>
> The tough question was the magnitude of the correction.
>
> Fibonacci buyers failed at all known levels.
>
> Although my innovative research was not posted this period, Oblique
Fib
> traders would also fail
>
> to catch the proper Buy level.
>
> This failure sounds somehow descriptive now but it could cost a lot
of
> money, because
>
> 1. 0.382 [negative]
>
> 2. 0.500 [negative again]
>
> 3. 0.618 [the great secret for many silent traders, but, negative
again]
>
> 4. 0.786 [many traders leave "the others" buy at 0.618 and come and
buy
> everything at the tricky 0.786 but, the market is negative again]
>
> 5. 1.000 [Well, there is no doubt we still have a bullish
environment,
> the market will react at this level, but, negative again]
>
> 6. 1.618[the situation is serious now, buy at this level is
equivalent
> to a bank guarantee etc etc]
>
> This is the most tragic case, IMO. These buyers still wait, the
market
> ignored their intension, the market
>
> was not interested for the color of their money, if they still want
to
> buy let us take now a +2% and a +2.4%
>
> and, if they forget these Fib stories, let them buy +5% higher. If
they
> do not agree, they will pay another +5%
>
> 3 days later, it is a free market, they may buy whenever they
want !!
>
> Since it is a real story and not a trade-fiction, I think I will
never
> place an order at any Fib level, horizontal
>
> or [the new] oblique.
>
> Dimitris Tsokakis
>
>
>
>
>
>
>
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