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Hi Al,Dan,Neal,
I like that... You seem to own this unknown book that explains it all <G>
But it's true that these 1-1-2-5-8-13-21 .... series turn up in reality in
the fields you and your book mentioned.
So rhythm is everywhere. And we human beings seem to have the need to put
everything in cute little formula's to make us feel more secure and in control.
I use these fibonacci numbers as well in my trading. They work best as (for
me) as retracements-levels in extended trends, where they tend to give me
good signals to go with this trend.
Why they work, I don't know but it is as Soros once said: "Trade first,
analyse later".
Which I translate into something like, after I made my zillions with those
number I can always spend my time in investigating why they worked <GG>
Linda Bradford Raschke might have the answer where she says:
- Now some people like to do retracement numbers, some people like to do
Fibonacci numbers. Any number is going to work because it focuses your
attention on market action relative to another number. You can take any
number and ask if the market is getting closer to or further away from it.
That's all tape reading really is. Is the price making progress towards or
away from that number? -
I agree and it at least puts some consistency into my trading.
Enjoy the rest of your weekend,
Frans
At 12:55 5-09-98 -0500, you wrote:
>Years ago I purchased a small book (100pp) that very adequately explains
>Fibonacci. "Fascinating Fibonaccis, Mystery and Magic in Numbers" by Trudi
>Hammel Garland. ISBN 0-86651-343-4.
>The book covers Fibonacci origins and definitions, Fib numbers in nature,
>art, music, science, and the mathematics of Fib numbers. Interesting book.
>
>Al Taglavore
>
>----------
>> From: Neal Hughes <neal@xxxxxxxxxxxxx>
>> To: metastock@xxxxxxxxxxxxx
>> Subject: Re: Theory behind Fibonacci?
>> Date: Saturday, September 05, 1998 9:53 AM
>>
>> At 01:53 AM 9/5/98 EDT, you wrote:
>> >In response to some of the posts on this list, I spent some time fooling
>with
>> >the Fibonacci retracement tool built into Metastock. I dismissed it in
>the
>> >past without looking at it, but, it appears there may be something to
>it.
>> >Does anyone know the theory behind Fibonacci numbers as they relate to
>> >securities? Do they work just because the technical analysts think they
>are
>> >going to work and act accordingly or is there more to it than that?
>> >
>> >Then again, maybe it doesn't matter why they work as long as they work.
>> >
>> >Thanks,
>> >
>> >Dan
>> >Pocatello, ID USA
>> >
>>
>> Dan, no-one really knows why Fibs work. If we knew, everyone would use
>them,
>> so they would no longer give me an edge in the markets, so I'm not
>looking
>> forward to the day when we figure it out. Since we don't really know, it
>> takes a leap of faith, which stops most people from using them, just the
>way
>> I like it.
>>
>> I studied some old charts printed in the old classic book "Technical
>> analysis of
>> stock trends" by Edwards and Magee. Those charts date back to before Fibs
>were
>> popular, before computers and charting software. Fibs worked great in
>those
>> times!
>> That's before they could have "worked because they are self-fulfilling"..
>>
>> There are more advanced Fib techniques than the simple retracement tools
>in
>> charting packages, which give me a further edge. Follow the link at the
>bottom
>> of this message to explore those techniques.
>>
>> I once wrote a page or two on why I think fibs work, read it here:
>> http://www.halcyon.com/neal/fib.html
>>
>> Best wishes,
>> -Neal.
>>
>>
>> ---
>> DiNapoli Fibonacci techniques -
>> http://www.fibtrader.com
>>
>>
>>
>
>
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