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In a message dated 97-12-24 12:34:54 EST, ckn58@xxxxxxxxxxx writes:
<< Time was when one could
have counted technical analysts in India on the fingers of one hand. Now
with electronic trading the norm, TA has recd a massive boost. I now
find that the Fib retracements,especially 0.618, working like a charm in
all kinds of stocks. To my mind this is conclusive evidence that if
enough people start using something, it is bound to work (for a while at
least, >>
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Dr. Narayan:
I believe your views are valid yet I prefer to think in slightly different
terms. I believe "markets" can grow into a fib environment. At first, when
markets get started, they are subject to influences which can overwhelm the
fib ratios. These forces may be government, economic or political. When a
market gets large enough to withstand these attempts of manipulation, they
start to respond to a larger natural force and fib is part of this force.
Therefore, I believe that fib is the natural response by the market once it
matures. Until that time, it can have wild uncontrolled fluctuations.
When I position traded, there were some markets that I would not trade because
the markets could still be manipulated by a relative few but powerful sources.
These tend to be the markets with the least liquidity as shown in TASC. These
markets are old in time but not in size so they represented a very real threat
to my analysis even though there is no doubt the moves can be extremely
profitable.
Good Trading.
Lynn
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