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Hello,
Please see my answers interspersed below.
At 11:33 PM 4/10/2002 -0700, you wrote:
>On Wednesday, April 10, 2002, 11:02:34 PM, Neal Hughes wrote:
>
>NH> Fibonacci is only useful under certain situations. Some Fib levels
>NH> are a waste of time, unless certain market conditions exist.
>
>An interesting point. Are you suggesting
>
>(1) Fibs contribute a small but 'fixed' probability, but the overall
>probability is improved by confluence with other indicators, or
I'm saying that Confluence of Fibonacci levels dramatically increases
the likelihood that price will turn at that level.
>(2) Fibs have a conditional (and variable) probability that varies
>according to other 'market conditions'?
Well, Fib support will more likely "hold" in a retracement of an
up-trend, than it would if there were a strong down-trend.
>Which are you suggesting (or none of the above)? :-)
>
>NH> For example, if a chart is reaching a maximum historical
>NH> overbought/oversold level, at a SIGNIFICANT Fib level, it becomes
>NH> an attractive trade.. Then I watch for a particular trigger,
>NH> entering if there are tangible symptoms of a market reversal at
>NH> that price-point... Line those ducks up an viola!!!!!!!!
>
>This sounds a bit like confluence, but I don't want to put words in
>your mouth.
Confluence to me is a specific term defined as an area where multiple
Fib levels coincide.
I also use other indicators to fine-tune and trigger the trade. But not
in a way that I would call Confluence. For example, Fibonacci would
be predicting (in advance of market action) a possible turning point.
I wait for another indicator (MACD) to prove that the market is
turning (lagging indicator, showing a turn AFTER market action).
-Neal.
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