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This argument seems to focus on whether fib numbers are right or wrong most
of the time. My question is, "What difference does it make?". One person
can be right 95% of the time and lose money and another can be right 28% of
the time and make money. I remember many years ago a big name guru won a
trading contest and after looking at his trades he lost on every trade except
one. He rode that one to the championship. It is not what you use to trade,
it is how you use it. If using fib numbers will make you money, use them.
If they won't then get something that will. If you don't feel that they will
stand alone, find an indicator that will give you confirmation that your
trade will be successful. There are systems that are very successful and
based upon money management alone and become even more successful when you
add a simple trend line. You really don't need to do statistical analysis,
years of back testing and fitting to make your answer come out. All you need
is something that you understand, and then using it properly. Will fib
numbers work every time in the breading of rabbits? That is where the
numbers came from. I don't think so. They may work the majority of the time,
but I doubt all of the time. The numbers work in art, but not all of the
time. Is it like gravity, where it only works right in a vacuum? The problem
with most traders is that they use tools developed by others and have no idea
what they are supposed to show. They use crossovers to buy and sell when
that wasn't the purpose of the indicator. So do your homework, understand
the tools that you intend to use to trade with, and have a good money
management system in place. Above all, don't be afraid to admit you are
wrong. It happens all the time when you trade. Ira.
bondo92677 wrote:
> Like I said, you're obviously not a trader. So if you somehow prove
> that fibos work 51% of the time it works but if it only works 49% of
> the time it doesn't?
> I've often seen the fibo retraces in a 2nd or B wave retrace act as a
> spring board for huge moves. More often it doesn't. But if you have
> the proper set-up and have other forms of analysis confirming the
> time and price, the fibo level can be a high confidence trade. So if
> you're wrong you got stopped out for a small loss. If you're right
> it could be a huge money maker.
> And who's says you're going to lose money if it works less than half
> the time? what are you, an accountant?
> Anyone who depends solely on fibo analysis would be a moron. You can
> try to prove the fibo's statistical accuracy all you want and its not
> going to make any difference. And as I already mentioned, I can come
> up with an infinite number of fibo applications, so there's no point
> in analyzing whether it works or doesn't work.
>
> --- In realtraders@xxxx, ztrader <ztrader@xxxx> wrote:
> > On Monday, April 15, 2002, 8:29:58 PM, bondo92677 wrote:
> >
> > b> Just like everything else, it works and doesn't work.
> >
> > Yep - I was just trying to see if we could find the probability,
> just
> > like with anything else. Work/don't work is binary - I was just
> trying
> > to get a better measure, that's all.
> >
> > b> when you mention fibos, you're not only mentioning .618, .382,
> > b> .236, .146 retracements but reciprocals, and roots and power
> > b> levels. You can use fibos for extension targets, alternate wave
> > b> comparisons, and time targets.
> >
> > OK, but I'm missing your point.
> >
> > b> If it worked you made money, if it didn't you lost a few tics.
> >
> > If the probability of 'working' is .05, you will soon be broke. :-)
> >
> > b> Show me something that works all the time and I'll be The
> Amazing
> > b> Randi.
> >
> > Ummmm.... I don't think anyone was asking for something that worked
> > all the time. Can you point to a post that asks for that? A
> probability
> > doesn't mean it works all the time, as Vegas visitors know well. :-)
> >
> > ztrader
>
>
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>
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