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Joe-
That was a most informative post. I had never even thought of using a series
of oscillators to calculate support and resistance levels. I have always
just been focused on overbought/oversold and divergence. Thanks for a great
idea.
Ron Scott
-----Original Message-----
From: owner-metastock@xxxxxxxxxxxxx
[mailto:owner-metastock@xxxxxxxxxxxxx]On Behalf Of Joe Duffy
Sent: Friday, March 16, 2001 5:44 AM
To: metastock@xxxxxxxxxxxxx
Subject: Re: Profit Stops
The idea of Fib targets is in essence the same as retracements. That is that
ANY 3 points (that is any combination of high or low pivots) MIGHT be
divisible in the Fibonacci ratios. It is in essence a division of any space
delineated by any combo of swing highs and lows. If you know 2 points it is
simple math to forecast the third.
That's a lot of potential choices you say? Well, your right. That is why in
my opinion you can't just use one thing to calculate your potential support
and resistance. Your chances increase exponentially if you have two or even
three measures involving different high and low pivots and/or ratios
yielding very close to the same target area. A lot of work you say? Well,
your right again. How to make it simpler?
First, after you become familar with the techniques, you can kind of eyeball
the charts and spot potential
setups. Like wise, you can see where nothing is likely to be close. That's
just experience.
However you might be just as well served to forget this stuff. It works, if
you do the work and have the experience. But if you want to go a shorter
route, you might try just eyeballing an oscillator, something like say the
Chande momentum index. Take a look at where tops and bottoms usually form in
your market on average. Try 2 or 3 different oscillator lengths together.
You will be able to draw a pair of horizontal lines on the chart which will
be roughly coincident with levels where swings tend to bottom out or top
out. Hence you know the level where, in a general statistical sense, any
swing move is getting long in the tooth. This is your profit taking area.
The other thing to note is Fibonacci is not as easy as it once was. In the
mid 80's when I started using Fibonacci relationships, they hit turns
fantastically with near 90% reliability. Unfortunately, I didn't have the
confidence or the other trading skills necessary to take true advantage of
what I had discovered. It's definitely not as easy now, as more people are
armed with the same information. Even worse for the Gann Square of Nine,
which was an unbelievable tool until it became part of more main stream
technical analysis.
The other piece of advice I might give is "think outside the box". Just
because it is written in a book does not mean it's right. And other times
what is written, may not be the full extent of potential for the concepot or
idea discussed. If you are attracted to the type of analysis that is
different then say programming on TradeStation, you need to bring your
imigination with you on your journey.
----- Original Message -----
From: Ron Scott <ron@xxxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Sent: Friday, March 16, 2001 1:17 AM
Subject: RE: Profit Stops
> Neal-
>
> Just wondering why the Dinapoli book is not available on Amazon, where
most
> trading books are available, along with a wide range of reader reviews?
It
> is always nice to get a variety of opinions before plunking down $160 for
> yet another TA tome.....
>
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