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This was an excellent post. As such I better jump in now, before those who
can't trade start criticizing those who do trade. Neal, nice job.
----- Original Message -----
From: Neal Hughes <neal@xxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Wednesday, May 16, 2001 1:41 PM
Subject: Re: [RT] Re: Fibo Research
>
> List members,
>
> Fibs are a lot of fun, and can be very accurate and consistent. But
> not on their own! You can't just blindly trade Fibs, you need to
> combine some lagging indicators..
>
> Fibonacci gives you a look into the future. They tell you where
> future support and resistance is, BEFORE price gets there. This
> is very powerful. But to the novice, it is very dangerous too. Novices
> are usually wishing for a magical indicator that will easily tell them
> when to get in and out.. Hehehe..
>
> As with ANY trading tool, you will find they work sometimes, but
> not others. How do you decide when to believe them?
>
> After years of studying and applying, I can say that this is a
> learnable skill and that you can become very good at it. But don't
> expect a computer to figure it out and make decisions for you.
>
> It would take a lot of explaining, but here are some pointers:
> 1) Trade only with the trend, OR with a good directional pattern.
> (directional patterns can over-rule trend, actually predict a change
> of trend before it happens).
> 2) Get good at watching the MACD and Stochastic in different
> time-frames. This will tell you exactly which fib level is most
> likely to turn price.
> 3) Give preference to trades which put your entry or stop in
> an area of Confluence or Agreement (some people call this
> clustering).
> 4) Employ entry techniques which reduce the need for you
> to guess! Enter when a Fib level is actually supporting
> or resisting, not before. This is not essential, but is highly
> recommended for those who are learning Fibonacci techniques.
>
> There are more advanced techniques to make your win-loss ratio
> really impressive, but you're not going to learn all of those via email..
> The above is a good start. With some study and experience you
> can boost your performance with Fibonacci techniques.
>
> Years ago I did a web-based survey, asking traders why Fibonacci
> techniques work.. The results were interesting.. What is important,
> is that they work.
>
> -Neal.
>
>
> At 03:13 PM 5/16/2001 +0000, you wrote:
> >To me, there are two practical problems with fib #s on their own: 1)
> >lack of consistent precision -- people still put stops just beyond
> >them, tempting the boys to run them when they can. So while they are
> >sometimes precise enough to be useful, it isn't consistent. Also,
> >there are times when log scale works and times when lin does. 2) How
> >do you decide which fib # is going to work? Sometimes clusters help,
> >but not consistently.
> >
> >I have come to respect angular geometry techniques like Andrews more
> >than fib for turning points. Much more precise. Amazingly, there is
> >usually an Andrews reason for those turns just above, just below, or
> >nowhere near fib #s. I still look at fibs, but as a secondary
> >consideration.
> >
> >I don't know how this could ever be tested other than manually
> >though, not in TS anyway. The code for the best fit for Andrews
> >would be pretty darn big.
> >
> >Chris
> >
> >
> >--- In realtraders@xxxx, "Dan Harels" <harelsdb@xxxx> wrote:
> > > This is directed to Research, however, I encourage others with
> >insights to
> > > reply.
> > >
> > > In a previous post, Research indicated that he is fond of figuring
> >things
> > > out and that a good share of his trading profits go towards
> >computational
> > > power. Mr. Research has established his credibility in my mind and
> >I am
> > > curious if he has performed any studies related to the statistical
> >validity,
> > > from a trading point of view, of Fibonacci retracements and
> >expansions. Any
> > > information he cares to share on this subject will be appreciated.
> > >
> > > Thanks,
> > >
> > > Dan
> > >
> > > _________________________________________________________________
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> >
> >
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