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Eliot, apologies for the delay...
See below..
At 04:18 PM 5/16/2001 -0700, you wrote:
>Neal,
>
>Thanks for the post!
>
>I'm wondering if you would care to elaborate on a couple of your points,
>in particular, #2 & #4.
[snipped]
>But I still get "plucked" at entries sometimes, cause I'll be in a tad too
>early at a .618 lets say, and the move will turn at the .786, and my stop
>won't be deep enough, or, I've waited for the turn, and I'm in the move a
>few points late.
I don't use the .786 at all! Instead, I use the .382 or .618 measured from
different time-frames. Experience has shown that the other
fib levels are not dependable enough.. They work, sometimes, but the
additional effort and confusion just isn't necessary.. I keep
it much simpler..
If your stop is not hidden behind a Fibonacci level, there is a strong
probability of it being hit when price goes against you. This
is key, put your stop behind a fib level. I think this will help with what
you mention above..
Sometimes when you try to enter after price has turned, you will not get
in. That's ok, it happens. However, this is how
I trade that situation.. I may wait for a 60-minute cross of a fast MACD
over a slow MACD, to confirm a fib level
is a good one. so I enter after price has turned (MACD is lagging price, so
the entry is later). When MACD has crossed
(60-min chart), I drop to a 15-min chart, and enter on a smaller Fib
retracement. So I enter later, but on a retracement
when price is coming my way again (lower time-frame). It makes for a more
secure entry, and also another important benefit... The
benefit is that you can hide your stop below the fib level that has just
proven to be good, so you have a closer
stop than otherwise.. I hope this makes sense, email is not the easiest way
to explain..
>BTW: I'm trading the S&P intraday, as you might have guessed. And I'm
>familiar with Joe's work through a couple of his workshops. In fact, you
>and I met at one of those a few years back.
I'll be flying into Washington DC for the Traders Library seminars on June
22nd & 23rd, in case we can meet again..
>I'm interested here in your thoughts on the stoch and MACD as supporting
>players, and how you set them up and use them.
>
>Relating to #4, I'm wondering what you think about the "entry" itself. If
>I get short "as" the bar reaches the fib, for example, I'm in early, which
>is great when I'm right. But I'm obviously wrong more often at those times
>as I haven't waited for the "topping action" to occur. On the other hand,
>if I wait, I miss more moves, or get in late, which has its own set of
>stop related repercussions. I'm sure you understand.
Yes exactly! You need to do what fits your personality best. You are making
a choice between two options.. Do you like
beautiful buns or beautiful breasts.. Both are not an option in the current
trade.. So if you want to get in early, at a better
price, you have more pain while the trade goes against you a bit before
moving your way, and sometimes the chart
goes the wrong way completely. The other option is to get in a little
later, at a worse price, but the odds of the trade
being profitable are better. Better because price has already turned at
that fib level, it is less dangerous. So you buy
some insurance, by getting a worse entry. AND, sometimes you miss the trade.
Missing the trade is not a problem. There are many more trades. Don't
bother trying to get every trade. It's impossible
to get every good trade. There are so many of them! I did write about a
technique above to help you get in later in the
move, when it is possible.. Drop to a lower time-frame.
>Anyway, thanks for any thoughts you're willing to share.
>
>Eliot
Sure!
Take care,
-Neal.
>>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
>>> >
>>> > _________________________________________________________________
>>> > Get your FREE download of MSN Explorer at http://explorer.msn.com
>>>
>>>
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>>>
>>>
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>>
>>
>>
>>
>>To unsubscribe from this group, send an email to:
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>>
>>
>>
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>
>
>--
>^^^^^^^^^^^^^^^^^^^^^^^^^^^^
>Eliot Kaplan
>20211 Croydon Lane
>Topanga, CA 90290
>Voice: 310.455.3810
>Fax: 310.455.3085
>email; eliot@xxxxxxx
>web: www.isu.com
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