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>Re: Fib. Numbers
>
>It also appears to me that the use of these numbers are used by large and
>small investors and traders alike which should render them ineffective.
>However, it also appears that these numbers are effective.
>
>So can anyone explain the above dilemma?
Logically, if a lot of people (or a few people with big money) believe
in a support level, it will tend to make the "system" work as a self-
fulfilling prophecy, but it will become harder to get a good fill.
Some will start to place orders above the support in anticipation,
and if enough of them do this, the support level would change.
If "everyone" believed, the market would never retrace to the Fib level.
Who would sell to push it down those last few points, knowing it will
reverse?
A certain degree of popularity can make a "system" work better than it
has historically. It's a case of knowing how a large group of players
will act. If it were to become too popular, it would stop working
because there would be less money on the other side to share. Even
if Fib numbers reflect a natural order in the markets based on human
psychology, they could cease to work in the future.
Wayne
wlm95@xxxxxxxxxx
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