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Neal Hughes wrote:
>
> Walt, Tom, (Realtraders),
>
> This is an interesting discussion.. I've looked at some old charts, and it
> is apparent that Fib rules applied in the 1920's and 1930's.
>
> I'd have to agree that every market turn could be a .618 retracement
> from "somewhere", so .618 is as good as any random number for that
> purpose...
>
> However, could you profitably trade using any random number in this
> way? The answer is no.
>
> I have an open challenge to anyone who can trade profitably
> using a random number instead of .618, .382 etc..
>
> -Neal.
Neal,
You must have missed the infamous "Duck" post. :) It graphically showed
that a randomly generated ratio set COULD call turning points just as
well.
As to your challenge, perhaps the question should be has ANYONE here
profitably traded .618 retracements? I'm talking winning consistently
over a 6 month time period. (Hopefully more, we're trying to make a
living here. :) ).
I've heard an awfull lot of wonderful claims, but have seen very few
profitable traders using it. Trading I mean. The guys selling Fib
methodologies certainly rake it in. :)
The only verified Fib trading record I have seen, was some of
Joe Duffy's trades. 1 out of a million traders doing it. what kind
of ratio is that?
The infamous "duck" post aside, would I trade a randomly generated
ratio set in real life? Nope, because I know that while the turning
points SEEM to be accurate, it is very difficult to trade. However,
I feel that Fib ratios fall in this category as well. (IMO anyway)
Here's an interesting point, and it ties in with what you and Tom
said. Human psychology is a funny thing. Let's say you have generated
3 possible turning points for a market: 1.618, .618 and .382 . the
average Fib trader spends so much time mulling over which will
represent the REAL turning point, that he often doesn't take the trade
at all! :) Now, figure in that most Fib traders actually calculate 8
to 12 turning points, and think about it.
An interesting thread here, might be the causul methodology by which
any profitable Fib traders on the list decide to trade a particular
turning point. Let's say you traded a .618 retracement. Why? How did
you reach your decision, and how did you place the trade?
I think it was Tom that posted some day-trading examples that were
interesting.
Anyone else, have some of their trades they would like to contribute?
Walt Downs
CIS Trading
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