# The Fibonacci and Golden ratio myth



## Knobby22 (1 November 2006)

The Golden number or ration is a myth, from Michigan here is the minutes of a discussion from the Freethought Association but Dr Karl from the ABC and many others have made similar points. 

I can't take them seriously as a trading tool.


The topic for this meeting was “The Myth of the Golden Mean” presented by Shane Van Oosterhout and Bill Fischer, Adjunct and Associate Professors at Kendall College of Art & Design in Grand Rapids. Shane took the lead in presenting, while Bill ran the visual presentation and fielded some queries. Shane opened with a story about how a co-worker asked in an insistent manner if he was worried about doing his presentation this night. He really was not but when he asked why she was so concerned, she reminded him that this was the opening night for Mel Gibson's film “The Passion of the Christ” and maybe there would be a poor showing to hear his talk. He thought how, with this group, such concerns were not really an issue. Further, he commented that while he is a triple threat””gay, vegetarian and an atheist, it is the last feature that is the least well accepted by most others.

With his work at an art college (that incidentally this Secretary graduated from), he is well aware of the ubiquity in which the Golden Mean- also referred to as the Golden Section, the Golden Rectangle and the Golden Ratio-- is taught in mainstream fashion in art education. It is a given””not to be disputed or questioned. It appears in textbooks and is promulgated authoritatively by professors and professionals of many disciplines and is simply a part of what is imbibed by each successive generation of neophyte designers by those wishing to integrate art with something supposedly ancient, arcane, and sublime and with the added bonus of its strong whiff of science and mathematics. This is all part of the “unwitting use of fiction as fact that permeates our culture”, as Van Oosterhout said it.

This form, believed to be the Ideal or even “Divine” one is constructed mathematically as .618 X 1. Anything created that includes these dimensions is alleged to be automatically more pleasing to the human eye. It is thought to be derived from something almost magical or otherworldly. Seen as transcendent and cosmological, it is believed to tap into some universal truth within humankind. Indeed, Carl Jung's work was usurped to include this formula as part of his concepts on the “Collective Unconsciousness.” Modern science has gone a long way in explicating the role of our genetics and evolutionary past on our perceptions and preferences and in finding certain forms and patterns to be evocative of specific concepts and ways of determining stimuli in predictable ways. But our presenters' focus was on exploding the myth of the innate perfection to the human eye and mind of the so- called Golden Ratio.

The success of the strong belief in the power of the Golden Section is one more of marketing than science, Van Oosterhout maintained. We examined the historical context for this putative truth and were not surprised to find that its origin was in Ancient Greece, often thought of as the wellspring of beauty, art, truth and of mathematical values standing in for deeper, more resonating concepts. Numbers were viewed as having certain hidden meanings, Magic Numbers revealed the names of gods and could tell the story of the cosmos. Sometimes names, where letters had certain specific numerical values, were refashioned to shoehorn them into the magic number set, to lend more credence to the power of the representation. Pythagoras (580-500 B.C.E.), the Greek mathematician and philosopher is credited for developing the theory of functions, and the theorem for right angles but also, germane to this discussion, the significance of numbers and how they relate to harmony in a more universal sense. 

“Harmony” Van Oosterhout noted, is the term most strenuously bandied about in the art world. If a work lacks harmony, no matter its other characteristics, it is a failure. The Ancient Greeks related music, visual art and the deeper values of the universe by the idea of harmony, and some used lengths of string with their different sounds to correlate with mathematics in determining ideals. The planets themselves made musical sounds, in their belief system. These constructs of the Ancients were borrowed and misinterpreted to lend credence to the phrase “Nature reveals Truth about how to make things beautiful.” They were thought to be the progenitors of the Golden Mean, even though such a description would not coined until long afterwards, in the 19th Century. In many textbooks it is dogmatically asserted that the Ancients used the Golden Ratio, calling it by that name, even though there is no basis in historical fact for this. 

Five sided shapes””pentagrams- were held to be imbued with special power, and one can easily bring to mind Satanic rituals using that form to call up demonic entities and even the Masons use the shape in their iconography. When wedded to the Golden Ratio, there was believed to be an embedded Divine power. The belief that calling something by name exerted a special power over, or connection with, the being named was tied into the numbers (transposed from these letter symbols) and forms that could be constructed by the proportionate values, so forms that harkened to specific geometric constructs captured all these aspects in one fell swoop. A story of the Divine, of Absolute Truth and Universal Beauty could all be told by certain mathematical formulations rendered in geometric shapes.

Popular reverence for the thinking of the Ancients waned but was revived during the Italian Renaissance, which is understandable since it was a time of a great explosion in ideas regarding art, science and mathematics and how they inter-related. Those swimming in these heady streams, looked to the Ancients to try to uncover how they arrived at the concepts they had generated. The human body was seen as the most sublime form in nature (after all, we were the Special Creation of God!) so much was referenced from its proportions. The navel held special significance, and this can be seen in many old religions where a centrality is conferred upon a place, lending it sacred meaning and as a sort of source point for the mystery and power of their beliefs. Geometric constructs that placed the human navel at some central point on the body (even though this is not technically the case) were held to depict something of a deeper truth. 

A problem that arose from employing the body for a system of measurement was that different people in other locations used different systems even though based on the body””for instance, if one wanted to build a structure based on arm lengths, and another population used, say, forearm to leg proportions as the unit of measurement, then the architecture altered accordingly. Palladio (1508-1580), an important Italian Renaissance architect, was particularly influenced by the Classical thinking found in a work by one of the ancient Greeks, believing it to be the bridge between the ancient and modern worlds and a way to capture the sublime in architectural forms. This, in turn became highly influential to 16th Century European thought which funneled into current views that are seen in America too.

The Bauhaus School went a long way in promulgating the concept of the Golden Mean into American consciousness. It was founded in Germany by Walter Gropius in 1919 and emphasized simplicity, functionalism and craftsmanship. It also held to a more rigid mechanistic, linear and harder edged way of creating art and architecture. It was the antithesis of the French Curve. Art instruction became almost totally subsumed by the Bauhaus tenets of modularity and boxy structure. The geometric architectonic look became wedded to ancient Truths of Golden Proportions to represent the Way to represent beauty and grace and harmony in any artistic work. Le Corbusier (Charles Edouard Jeanneret; 1887-1965) was a powerful proponent of this view. His writings and innovative buildings were seen to express a revolutionary approach toward aesthetic and architectural problems, and took an industrial, utilitarian approach. He was a co-founder of the short-lived Purism movement in art, also, that portrayed Cubism in a cleaner and more sterile way. His work influenced modern American towering building designs.

The decorative and curvilinear in art took a back seat. Art that was flattened, straight-edged or cubed was the new ideal. The Dutch artist Piet Mondrian founded the Stijl group and developed a geometric style that came to be referred to as “neoplasticism” typified by by primary-colored squares bounded by black outlines. His work was (incorrectly) thought of as capturing the Golden Section ideal along with the Bauhaus conception of beauty. 

In Victorian times, it was fashionable to take images of architecture or nature and put tracing overlays on them to “reveal the Truth of the Golden Section” in them. In the former, it examined how close to the Ideal the human-made forms approached, and in the latter it was to reflect the innate universal beauty and harmony of natural compositions.

One of the contemporary artists that was presented to us by Van Oosterhout and Fischer was a woman named Billie Ruth Sudduth, who “studied” Native American baskets and found in them this same perfection of the Golden Ratio, believing that they had tapped into this Truth as well. She now incorporates basket making with her sense of sublime mathematics in what she calls “Math in a Basket” where she believes she is illustrating math principles to sixth and seventh graders via basket making.


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## Knobby22 (1 November 2006)

*Re: Fibonacci and Golden ratio myths*

- the remainder of the article.

Just as the Victorians were placing the Golden Rectangles over images, this template has been placed over all sorts of items in the environment by others, seeing it expressed in everything from nautilus shells to seed arrangements to the curve of an elephant's tusk to the famous example of the Rose Windows of Chartres Cathedral. These mostly curved forms are primarily based upon the forms generated by the Fibonacci numerical series. Leonardo Fibonacci (Italian mathematician; 1170-1250) helped introduce Hindu-Arabic numbers to Europe. His series illustrates numbers in which each term is the sum of the two preceding terms. Forms constructed on this principle ripple outward in an exponential growth pattern. 

Interestingly, when one troubles oneself to actually superimpose the above-mentioned forms over a real Fibonacci series construct, the pattern is wildly divergent, with no sense of direct correspondence. Van Oosterhout took us through example after example where the Golden Ratio on which a work of art or nature was supposed be based failed to match up when the actual measurements were made. None of the artists and architects (or architectural structures) mentioned throughout from the Bauhaus darling, Mondrian, to Le Corbusier; from the Parthenon to the Mona Lisa, actually used the Golden Ratio or fit within the parameters thereof. When people retrofit this formula on structures and paintings, and are honest, they say that they “almost” or “nearly” or “approximate” the dimensions of the G. Proportion. While human perception is fluid and flexible; influenced by culture, training, and a myriad other elements, mathematical constructs are exacting. The idea of approximating, where something is made to fit a presupposed ideal, no matter how poorly, is not the stuff of math and science. We are pattern-seeking and seeing animals, which confounds critical thinking skills and makes us suckers for belief in the innate power of certain patterns that we then find everywhere””even when they are not there to be found..

Math is a tool used to measure and describe the environment””a human construct-- not something generated by nature and the environment. “Mathematics does not cause the fabric of the universe that it measures” as Van Oosterhout stated. We were shown two exact copies of a simple treasure map with two ways of telling the treasure hunter how to get to the buried riches. The math was different in both cases and our presenter showed how many more ways could be pressed into the same service, including using words instead of numbers. The maps depicted all the salient features necessary to find the treasure but there was no innate, magical or Golden formula in them. We were also shown two versions of Leonardo da Vinci's famous man with the proportional ratios laid out around the figure. One showed how the Golden Ratio was found in the V. Man, but the second showed a completely different, though every bit as likely a construct, based on the same figure but having nothing to do with the G. Proportion. This drawing of Leonardo's and nearly all of his oeuvre is given ceaselessly as examples of artwork being based on the G. Ratio but when it can indeed be found in some way, it seems more coincidental””more an artifact of human ingenuity in making patterns fit””than in any mathematical or artistic device used by the master artist. As Shane mentioned, many sound works of art have any number of focal point references in them. The greater the number of such points, the easier it is to overlay Golden Rectangles upon them.

We were also shown how our affinity for the Golden Rectangle is completely context driven. Our preferences for rectangular dimensions change, depending upon what is to fill those dimensions. This is whether there is already an image contained therein or if people are asked to select the most appropriate and pleasing proportions for a rectangle to later contain an type of scene. The choices made a Golden Mean completely irrelevant. 

One amusing visual that our presenters gave us showed the Great Pyramid of Cheops, which of course also was supposed to be built on the principles of the Golden Ratio (even though there was not the cultural exchange possible then to make this sensible). A photo of the actual ancient structure was shown next to what the actual G. Ratio would give for proportions and they were wholly different. The pyramid would have to be 800 feet tall by 800 feet at the base to fit the proper dimensions.

The problem is when something that has great explanatory value and utility like mathematics is misapplied to things in the environment for the purpose of generating a certain foregone conclusion. Art is often viewed as extremely imprecise and messy. If one can lasso something that seems to confer mathematical precision (not to mention absorbing ancient truths and mysterious, arcane knowledge) to a work of art, this bestows upon it great value in the eyes of many. It is almost like a form of “physics envy” for artists.

Critical thinking, Shane asserted, should be used in every sphere of study, including the arts. Artistic “truths” must be tested, just as scientific hypothesis are, in order to gain validity. Modern findings on human perception, genetics, socio-cultural influences, the electro- chemical biological processes of sight, etc. should all looked into for learning ever more deeply about how we interpret the world. 

Slapping an errant concept like the Golden Mean on art training that is absorbed uncritically and adhered to unquestioningly, does a real disservice to the arts and sciences both. It is a seductive idea that sells books and, like religious concepts, gains power by dint of being told repeatedly for a long long time, not for any actual accuracy inherent in the ideas. Also as with religious convictions, such errant myths as the Golden Ratio are imparted by authority figures and stem from ancient times, lending an automatic imprimatur to the concepts. Who are you, one might think, to challenge something held by the best textbooks, imparted by learned professors and handed down from the ancient Greeks and used throughout history in the making of the greatest works of art and architecture! But sometimes the Emperor simply has no clothes. 

http://www.freethoughtassociation.org/minutes/2004/Feb25-2004.htm


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## Space Cadet (1 November 2006)

This website explains what Fibonacci numbers and the Golden Ratio are and how they occur in nature.

They look pretty real to me.


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## Knobby22 (1 November 2006)

Check this out then.

http://www.lhup.edu/~dsimanek/pseudo/fibonacc.htm


It is a common myth, even Wikopedia spreads it!


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## Space Cadet (1 November 2006)

Knobby22

Mathematically, the Fibonacci numbers and Golden Ratio exist.

Whether you believe they exist in nature on not depends on whether you accept the proof given in examples like those given in the website I posted earlier.

Personally I accept they exist in nature as well.

Now, whether you think they are useful in trading or investment analysis techniques is another ball game alltogether.

Share price movements are largely driven by human emotions - fear and greed - which Fib's and the Goldcen Ratio do not take into account at all according to my understanding because they don't apply.

So like for all technical indicators and tools like the macd, stoch's, Fib's etc etc human emotions will lead to technical indicators, on some occassions, giving misleading or false signals. That is simply a given for TA.

Also, correct me if I am wrong, I read somewhere that anyone can alter or modify the info posted on Wikopedia.  So if that is correct then I wouldn't necessarily take as true what I read on there.


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## Knobby22 (1 November 2006)

Exactly, which is why you can't trust Wikopedia.
Myths die hard. The earth is still flat for some people.

K22


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## It's Snake Pliskin (1 November 2006)

For those being spoon fed be warned the Fib ratios are not going to make you predict the future. For those using intelligent thought then you will understand their value and also their weakness.


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## Space Cadet (1 November 2006)

ok knobby - at least we agree on something 

but that doesn't mean everything on wikopedia is not accurate.  I've never been to wikopedia and so I don't know or care what is on there.

I use fib's on  charts to get a feel for possible price targets and more often than not they give a pretty good guide.

The mathematics is sound and real imo but human emotions, which are not taken into account with Fib's, not being an exact science by any means implies that it is dangerous to put too much emphasis on Fibs, or any TA indicator, for share price TA - but they are a good guide imo.


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## tech/a (1 November 2006)

Lots to say (Which is unusual!!) but no time at present----later.


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## It's Snake Pliskin (1 November 2006)

tech/a said:
			
		

> Lots to say (Which is unusual!!) but no time at present----later.




Thanks for the warning of the oncoming info.


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## kaveman (1 November 2006)

What has someones opinion on a tool used by artists got to do with trading?
As with all trading, whatever your persuasion, it is not the tools themselves but how you apply them that counts.


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## tech/a (1 November 2006)

After reading the evidence presented its pretty clear that Mathamatics can be used to PROVE anything you like and used to DISPROVE anything you like.
In this case Fibonacci.

As for the use of Fib in trading---where traders go wrong in my veiw is they are under the false impression that Fibonacci (Any of the numbers) are ALWAYS accurate.Simply they are not.

Just as the use in Elliot Wave analysis is also not 100% accurate--or Gann (Who uses gann ratios) also are not.

They are however areas or levels which to watch.

As an example a trend that pulls back and takes off again from a .382 level would be considered stronger than one that pulls back to .5 or .618 before re testing a high.

A 3rd wave Elliot move (From Experience) should be watched at the 100% level of the last corresponding wave 1 measurement and if it continues then the 1.618 level.Many times in short term trades it has helped me sell for maximum gain in THAT move.
Check the DYL thread to see just reciently how I used it in that trade.

I cant explain why these numbers do occur frequently enough to cause me to sit up and take notice to the extent that I will place a sell at close to their extreme and be close enough to be glad I did more often than not.

Basing them as ABSOLUTES is crazy and not a sound trading practice in my view.But to totally discard the idea as nonsence is equally as crazy.

The choice is that of the traders.
the arguement is and will have two sides infinitum.


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## Mostafa (1 November 2006)

Space Cadet said:
			
		

> Knobby22
> 
> Also, correct me if I am wrong, I read somewhere that anyone can alter or modify the info posted on Wikopedia.  So if that is correct then I wouldn't necessarily take as true what I read on there.




People edit articles on Wikipedia and we can't trust them always.


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## Porper (1 November 2006)

Knobby22 said:
			
		

> Exactly, which is why you can't trust Wikopedia.
> Myths die hard. The earth is still flat for some people.
> 
> K22




I think that the use of Elliot wave & Fibonacci numbers definitely give you a better chance than random of finding probable entry's / exits.They can also help with the psychological effects of trading, giving a reason to place a stop, or tighten a trailing stop to a probable ending area of a wave.Maybe this is because it is a self fulfilling prophecy, who knows, either way if it can give an edge, use it I say.

As for Donald E. Simaneks' article, he certainly gives Fibonacci a bad press.The only part I agree with is that maybe it is appealing because of the mystical element, but then again the human race likes mystic.

Just look at how many people believe in a superior being, as in God, Allah or whoever.Absolutely no proof at all that these or anything like these exist, but people believe.


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## It's Snake Pliskin (2 November 2006)

tech/a said:
			
		

> After reading the evidence presented its pretty clear that Mathamatics can be used to PROVE anything you like and used to DISPROVE anything you like.
> In this case Fibonacci.




Is that linear or non-linear mathematics?


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## wayneL (2 November 2006)

Who cares if it works? I looks pretty cool on a chart and it sound sexy when explained to noobs.  

But concur with Kaveman.  It's not the tool, it's the tradesman.


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## yogi-in-oz (2 November 2006)

Hi folks,

Just to add a little more fuel to the fire ..... 

Respectfully, Fibonacci simply claimed a long-standing
principle as his own work, when further research reveals
that Pythagoras also knew about the same mathematical
sequence, about 400 BC ... !~!

For further details, refer to Pythagoras' Music of the Spheres .

In fact, if you do some more research on the same sequence,
it is found in the NATURAL growth cycles of many animal and
plant species ... ie tree rings, crabs, worms, etc, etc, etc

..... and you can also add the OLDEST evidence in the same
sequence ... the ratio of Venus/Earth planetary movements
arounnd the sun, expressed in days:

226/365.25 = .6187542 = reciprocal of 1.618

Given THAT SAME planetary relationship has been in existence
since creation, there's nothing new under the Sun ..... 

happy days

yogi



=====


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## Knobby22 (2 November 2006)

All not true yogi.
Read the articles in this thread, there is an article about the stars, planets too if you look in google under myths.

K22


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## yogi-in-oz (2 November 2006)

...... puhleeeze knobby,

We are talking about the same mathematics that
sends rockets through our solar system and into 
outer space ..... without such accurate and established
planetary correlations, there would be no such exploration !~!

happy days

 yogi


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## riley (2 November 2006)

I was interested to see if this ratio did infact exist in the ratio of the Earth/Venus year length.

So I went the the foremost authority NASA, the people that rely on mathmatics to send rockets to the planets.
Here is their info on the Earth /Venus ratio

http://nssdc.gsfc.nasa.gov/planetary/factsheet/venusfact.html 

Look under Orbital Parameters and you will find that the Venus year is not 226  days but 224.7 which gives a ratio of 0.615 

There is no golden ratio or even reciprocal in the relationship, unless you fudge the figures to fit the theory.


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## yogi-in-oz (3 November 2006)

Hi Riley,

..... you will find that the slight disrepancy in the third
decimal place is due to whether you take a geocentric
or a heliocentric view of the movements of Venus and
its stations ... 

.... there's about 1 day difference, so to be more precise:

      Venus 225.75/365.25 = .6180698

happy days

 yogi


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## riley (3 November 2006)

Hi Yogi,

It is generally accepted in scientific circles that the Sun and planets do not revolve around the Earth (geocentric model) but the planets revolve around the Sun (Heliocentric model)

Therefore I will go with the NASA figures

http://www.astro.utoronto.ca/~zhu/ast210/both.html 

which show the ratio between Earth/Venus orbit period (year length) as 0.615 which as the reciprocal of 1.626  is not even close to 1.618 the Golden Ratio.


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## stevo (3 November 2006)

The Fibonacci sequence is useful to the extent that, if you build your own systems, you have to pick some numbers to use - at least as a starting point.

So using 5 or 13 or 21 or 55 or 89 etc is as good as using any other number for moving averages, targets, ATR periods, look back periods etc. I am sure that I could use other number sequences to select numbers but Fibonacci numbers are probably as good as any for my purposes.

I would not suggest that Fibonacci numbers do anything more than any other number sequence in terms of trading. But they are fascinating.

Stevo


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## yogi-in-oz (3 November 2006)

Hi riley, 

..... there's no question about the heliocentric view
and the planetary movements ... however, from our 
perspective as traders, we are NOT positioned on the
Sun and therefore, APPARENT planetary moves from 
our viewpoint on Earth are VERY relevant to traders,

..... that being the case, .618 IS a valid Venus/Earth 
ratio, from a geocentric view. 

Just do some in-depth study on Gann or Weingarten,
for more information ..... 

have a great weekend

    yogi


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## BSD (3 November 2006)

yogi-in-oz said:
			
		

> ..... there's no question about the heliocentric view
> and the planetary movements ... however, from our
> perspective as traders, we are NOT positioned on the
> Sun and therefore, APPARENT planetary moves from
> ...




FFS, you could also do a Masters of Applied Finance in the time it would take to 'learn' all the reasons/excuses for the shortcomings in planetary stockpicking. 

Then again, you wouldn't be able to sell too many books...

Did Gann print in landscape or portrait?
Did Saturn cause the Copper Demand/Supply relationship of 2006?

*Is 100% of this complete rubbish due to coincidence?*


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## riley (4 November 2006)

Hi Yogi,

You said in post # 17

"..... and you can also add the OLDEST evidence in the same
sequence ... the ratio of Venus/Earth planetary movements
arounnd the sun, expressed in days:
226/365.25 = .6187542 = reciprocal of 1.618"

I have shown that this is not correct using NASA information as a reference.

You then said in post #21 

"..... you will find that the slight disrepancy in the third
decimal place is due to whether you take a geocentric
or a heliocentric view of the movements of Venus and
its stations ...
.... there's about 1 day difference, so to be more precise:
Venus 225.75/365.25 = .6180698"

So by changing to a view where the planets and the Sun revolve around the Earth (geocentric model) you say that the numbers now work out to the Golden ratio. 


Please justify your claim that the length of the Venusian year increases by "about 1 day" when you change models, as this is crucial to your argument.
References or links will do fine thanks.

riley


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## It's Snake Pliskin (4 November 2006)

BSD said:
			
		

> FFS, you could also do a Masters of Applied Finance  in the time it would take to 'learn' all the reasons/excuses for the shortcomings in planetary stockpicking.
> 
> Then again, you wouldn't be able to sell too many books...
> 
> ...




Applied Finance is aptly put in red to display its worthlessness (though if you want a JOB as a business person, a person of the big world of finance then it may help). The current thinking and teaching of efficient markets and random walks dressed in CAPM, modern portfolio theory etc. is wishful thinking. If it were up the the efficient market theory, for what it is, then why do all funds and banks etc have so many analysts? Think about it.


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## tech/a (5 November 2006)

It's Snake Pliskin said:
			
		

> Is that linear or non-linear mathematics?




According To Kris my Physist son either.
He made arguement either way,which made little sence to me and seemed perfectly normal to him.


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## It's Snake Pliskin (7 November 2006)

tech/a said:
			
		

> According To Kris my Physist son either.
> He made arguement either way,which made little sence to me and seemed perfectly normal to him.




Yes well it is too much for me too. 

Where do all calculations start? And is the starting point or base worth its accuracy? Just thinking aloud here.


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## yogi-in-oz (7 November 2006)

Riley,

If you view two moving bodies from different points
in the solar system, they they APPARENTLY vary in
their orbital duration.

As Venus and Earth revolve in the same direction around 
Sun, the APPARENT time (if taken from Venus or Earth)
will be a little longer, than if viewed from the sun ..... now
that's NOT rocket science is it??

happy days

 yogi


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## motorway (20 June 2009)

I previously posted on this paper 

http://www.cass.city.ac.uk/media/stories/resources/Magic_Numbers_in_the_Dow.pdf

Here is a very interesting reply from

Robert Prechter  ( for obvious and not so obvious reasons imo)

http://www.socionomics.org/pdf/EW_Fibo_Statistics.pdf


motorway


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## Knobby22 (20 June 2009)

motorway said:


> I previously posted on this paper
> 
> http://www.cass.city.ac.uk/media/stories/resources/Magic_Numbers_in_the_Dow.pdf
> 
> ...




Two long and intelligent papers. Thanks for posting motorway. 

I agree with Robert Pretcher as I do agree with elliot waves as happening and being part of human nature in trading. You can see the patterns everyday and you can trade by them. 

The Fibonecci number price points is not generally true, as shown by the works. I believe it is more there as a way for people to justify their thinking and behaviour. It's good to see such serious works.


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## Mr J (23 June 2009)

tech/a said:


> I cant explain why these numbers do occur frequently




Self-fulfilling prophecy.


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## kam75 (7 July 2009)

Bill Williams - 'Trading Chaos' is a very interesting book to read if you're into Fibonacci, Elliott and Fractals.  I'm a mathematician by qualification and have fiddled with all sorts of stuff over the years.  Fractals and Fibonacci relationships are definitely found in market prices, just like in any complex, interacting system.  Williams has put together a trading system based on this.  Reckons if you ever doubt that it works, pay him at his trading room a visit.  I traded his system in the Forex markets and although it seemed to work at times, I could not get any consistent results.  The Fractals worked well when a trend happened.  But otherwise it seemed better to just buy a break of resistance or sell a break of support.  So next time I'm in the States, I may go and have a look at how well it works for him.


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## motorway (7 July 2009)

Forward displaced Moving averages -- Alligator mouth ?

Either a 3 or 5 bar pattern with the mid bar higher or lower
as the "fractal"

I am not so sure He has not moved away from that stuff

Markets are Fractal YES

Demand and Supply operate similar on all scales

But same major flaw here as in EW
and most of the so called "fractal" analysis..

They use the wrong Time Scale
and can be blindsided by the many artifacts thrown up by the "TIME FRAME"

They are always _will _be using the WRONG Time Frame

Because 



> *Physical *time””is  an approach (only)  suitable for inanimate objects




That should be obvious if it moves it MOVES

For such a thing

A time frame Conceals and Blurs
and is illusion esp the longer the Time Frame

but even watching 1 sec bars ( less distortion of some aspects of reality )
Has obvious problems , some serious...

As I watch the Cat in the Yard stalking Butterflies
it IS obvious...

motorway


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## skyQuake (7 July 2009)

motorway said:


> Forward displaced Moving averages -- Alligator mouth ?
> 
> Either a 3 or 5 bar pattern with the mid bar higher or lower
> as the "fractal"
> ...




Fairly cryptic post, but i think am getting the gist of it. 
Have you found P&F charts to be more effective than constant volume charts?

cheers


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## motorway (7 July 2009)

I have not used Constant Volume Bars Enough

I have to a point compared them to P&F
There were many similarities how they unfolded

They nearly ( limited experience ) moved indentically

I think over large scale P&F would be better

And I think it very useful that the P&F chart will stop moving sidways

I think possibly as you move up or down box size.. You get a better nesting of fractal realtionships

eg take williams fractal


consider such a pattern on P&F  Take 5 columns
Wait for number three column to be high or lower than the two each side

Such a pattern really is scale invariant on the P&F it will always mean something  it is always there... The 5 min hour daily etc bars are not really there, they are arbitrary ..

I would not dismiss CVB but what is correct volume
With P&F the trading range amplitude I am interested in defines itself

maybe same with CVB  ?

motorway


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## motorway (7 July 2009)

Cryptic ?

To the Cat and The Butterfly

There are only really two particular moments that will matter..

The one where the cat readies to spring ( if the Buttefly notes this it can "postion" itself to negate the cats pounce )

And the one when the cat actually pounces

If the butterfly is watching with a 5 min bar chart he is *eaten*
Even if he does EW analysis 

If the butterfly is watching a 1 sec bar chart , there is long time of nothing
a whole aeon , He probably falls asleep..and is eaten..

Now if the butterfly is smart he has a trading range ( recoil & pounce range )
amplitude P&F or CVB  ( V = energy expended by cat )

Now the Butterfly observes the Cat move and moves FIRST


It  does not fall through the cracks of a Time Frame , is obsured by the bluntness of a time frame 

or jumps at the artifacts of a time frame.

Does the cat move or not and what is best way to see in context..


motorway


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## motorway (8 July 2009)

skyQuake said:


> Fairly cryptic post, but i think am getting the gist of it.
> Have you found P&F charts to be more effective than constant volume charts?
> 
> cheers




have a look at this thread

on some discussion and examples
of P&F, CVB, CRB  & CTB


https://www.aussiestockforums.com/forums/showthread.php?t=8741&page=2



> P&F might still be the best non linear chart
> columns are neither constant price, volume or time
> adaptive is real
> 
> ...




motorway


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## OzWaveGuy (8 July 2009)

I've been following along with this thread and thought it might be worth putting some opinions up on the Fibonacci golden ratio and it's occurrence/non-occurrence in the stockmarket.

Some thoughts:

The Golden Ratio both does and doesn't occur regularly in the stockmarket - specifically within indexes. Confused, don't be, it depends on your point of view and the 'tools' you use that can assist in identifying such ratios. 

For example, using Elliott Wave analysis can readily identify the 'golden ratio' in terms of price relationships between waves of the same degree and moving in the same direction. On the XAO, the 61.8% relationship (plus or minus 5% - it'll hardly ever be exact) occurs regularly enough to warrant caution or can be used to set a preliminary price target (using 61.8% or 161.8%) once one wave has been completed.

For those not using Elliott wave, it will most likely be of lesser value to worry about such ratios. The main issue would be in identifying the start and end of waves to commence price measurements from in the first place. On the odd occasion a rough 61.8% corrective retracement may appear from a top or bottom, but it shouldn't be expected (50% would probably be a better ratio if you plan to use ratios for corrections in the first place). 

Some close 61.8% examples are below from the XAO at different degrees. For those looking for '3 decimal points' of accuracy - it won't be there, but as you can see, there are some close relationships in wave price to the 61.8% ratio

(There are several other dimensions that I haven't commented on or investigated to any deep extent, such as time, Fib sequences on both time and price).

Hope this helps those looking to better understand Fib ratios in the market, but will ultimately depend on your 'tooling' and whether fib ratios have any place in your trading plan at all.


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## motorway (2 January 2010)

http://www.constructal.org/en/art/DN 1067.pdf

Motorway


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## Garpal Gumnut (2 January 2010)

Ah yes , the son of Bonacci was a genius.

gg


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## brty (2 January 2010)

From the OP,



> I can't take them seriously as a trading tool.




I do take them seriously, because others use them. I don't, the % of wins is way to small. However if one of my signals happens to be on some fib number/ ratio, then all the better (yet it doesn't change what I was going to do anyway  )

brty


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## SmellyTerror (3 January 2010)

> ...the 61.8% relationship (plus or minus 5% - it'll hardly ever be exact) occurs regularly enough to warrant caution...




I admit I'm new to TA in general, but this is what gets me about Fibonacci. With such a range of uncertainty, how is it telling you anything at all? I mean, you've got Fibonacci numbers at 23.2%, 38.2%, 50%, 61.8%, and 76.8%. If you extend the range around each by about 5% each way, you've got 50% of the range covered, and discounting the fringe areas (non-trending?) from 0-18% and 82-100%, then your 5% allowance means those 5 Fibonaccis are covering 78% of the central range! Well no wonder stuff happens at those numbers rather a lot!

Eg: the 50% range could go up to 55%, and the 62.8% range comes down to 57.8%. So there's only a 2.8% gap for "non-Fibonacci" numbers to fall into. 

Now I'm not saying that everyone uses a +/- 5% range - but not everyone is getting a 78% hit rate, either. For a lay person who has just started looking into this, it just seems to me that, if there's any edge here at all, it's pretty tiny compared with MM and unconscious experience. 

That is, from where I am (in the Land of the Ignorant, looking down the Path of Learing Something I'm Not Sure I Want To Bother With), it looks to me like Fibonacci is more about getting the confidence to get into a trade, and that it's money management and the experience you have looking at charts that makes the success. There's such a lot of room to move with this stuff that I think it's just your "eye-balling" and all the unconscious calculation that goes along with it that's really putting you onto a trade. The Fibonacci stuff is just there to make you feel better about it.

Instead of saying "a 62.8% Fibonacci retracement" I could just say "comes back a fair bit", couldn't I? What you're talking about with a certain number is a rough degree that the price has moved, not a mystical rule of the universe. "If it goes down about that far, it'll often come back up".

That's what I think. I'll come back in a year and tell you how stupid I feel for having been so ignorant...


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## Wysiwyg (3 January 2010)

It's a bit like the dude who has 10 support levels over a 50 point range. Gotta get one right.  Not having a go at trading approaches but there is wheat, there is chaff and there is stuff that requires some more imagination. 

Two levels ... support and resistance. Simple.


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## Timmy (3 January 2010)

SmellyTerror said:


> I mean, you've got Fibonacci numbers at 23.2%, 38.2%, 50%, 61.8%, and 76.8%. If you extend the range around each by about 5% each way, you've got 50% of the range covered, and discounting the fringe areas (non-trending?) from 0-18% and 82-100%, then your 5% allowance means those 5 Fibonaccis are covering 78% of the central range! Well no wonder stuff happens at those numbers rather a lot!
> 
> Eg: the 50% range could go up to 55%, and the 62.8% range comes down to 57.8%. So there's only a 2.8% gap for "non-Fibonacci" numbers to fall into.




Re your words I quoted above SmellyT - can't see any problems with them.  If new traders use their intelligence in this way they will have a huge head start.

Fib numbers can be helpful to be aware of only in that, as other posters have already stated, others might be using them and their use of them _may _have some effect.


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## wayneL (3 January 2010)

I still reckon people have TA all wrong.

There is this notion that TA is used to predict future moves. I don't believe it should be used that way for a millisecond (although I do indulge in that sometimes for pure fun). I think TA should be used to set a trading hypothesis.

Radge uses the terminology of "creating boundaries", which I like and would like to steal from him and using these boundaries as parameters of proof and disproof of that hypothesis. We should know this, it was repeated, parrot-fashion, _ad nauseum_ here by a certain ex-member.

Despite it being being preached to the point of making us all puke, it is essentially true.

Does hitting a fib level predict a pivot point and reversion to the dominant trend? No way! That's toss of the coin territory or even worse.

But a fib level can be used as a boundary. eg "If the price drops below the _x_% level, my hypothesis is incorrect and I will take such action as determined beforehand should such boundary be breeched."

You can create a hypothesis that says the trend I want to ride does not retrace past the _x_% level. While above that, I'm in... below that I'm out. (Or something like that)

FWIW


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## Timmy (3 January 2010)

wayneL said:


> But a fib level can be used as a boundary. eg "If the price drops below the _x_% level, my hypothesis is incorrect and I will take such action as determined beforehand should such boundary be breeched."
> 
> You can create a hypothesis that says the trend I want to ride does not retrace past the _x_% level. While above that, I'm in... below that I'm out. (Or something like that)
> 
> FWIW




I like this idea, but ....

Using a Fib number is essentially using a random number - the hypothesis is therefore based on "if the price falls below some random number" I am incorrect.  (Wayne, I have simplified, apologies, but hopefully the gist is clear).  It is the 'no better than random' aspect of Fib that makes them useless for forming hypotheses, in my book.

(ps.  There may be thinly-traded markets where the Fib numbers can have an impact - i.e. pays to be aware of them because others trading in the thin market may be using/aware of them.  In thick markets the impact of Fib-using traders will be negligible).

(pps. I find the main use of TA is in assessing responses.  Not an original idea, thanks mainly to Motorway)


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## wayneL (3 January 2010)

Timmy said:


> I like this idea, but ....
> 
> Using a Fib number is essentially using a random number -




Yes, agree. But many of what we traders use is essentially random numbers. 

Moving averages, although they may be used with an overriding logic, are essential random. An arbitrary mathematical construct using past data, just like fib nos. or chandelier stops or bollie bands.

Let's say we use the 100day moving average as a trailing stop. If it touches, we exit. There may be reasons for selecting that MA, but it is still essentially a random number we have selected using some elaborate justification.

But it is a defined boundary and precipitates a decision based on the hypothesis we are using.

Fib numbers can have an extra layer of nebulousness do to the arbitrary selection of swing highs/lows. 

Fibonacci is great for impressing people at parties and trading noooobs willing to part with $6k for a course, but otherwise totally agree.


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## Frank D (3 January 2010)

Randomness comes from the association of trading rules that are
 purely directed to the number in question or pattern in question. 

That’s the only way you can validate randomness, the association 
of generic rules, 'the number', and then the end result: - Profit or loss.

A pivot point or a Fib number is useless unless it’s proven to work using
 a generic set of rules.

Is the fib number the ‘boundary’, or the rules associated with the fib 
number the boundary?

How many times does a level fail only to see it swing back late in the day 
or the next day and move in the original direction it was intended?

You don’t know the answer because you haven’t formulated a generic set 
of rules to test it.

Labeling something just for the sake of labeling something, is typical 
what you read in 99% of trading literature. All looks good in hindsight.


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## brty (3 January 2010)

Wayne,



> Does hitting a fib level predict a pivot point and reversion to the dominant trend? No way!




Agree 100%, yet how the price action hits a level can be far more important.



> "If the price drops below the x% level, my hypothesis is incorrect and I will take such action as determined beforehand should such boundary be breeched."




I have a belief, based on a lot of research, that the bit of a spike through some of these common numbers/ easily identifiable levels is deliberate by some larger players to set off stops. 

Frank,



> How many times does a level fail only to see it swing back late in the day or the next day and move in the original direction it was intended?




That is my point above.



> Randomness comes from......




Let's not go into randomness, or my belief of lack there-of, we will get wayyy off topic.

brty


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## Timmy (3 January 2010)

brty said:


> I have a belief, based on a lot of research, that the bit of a spike through some of these common numbers/ easily identifiable levels is deliberate by some larger players to set off stops.




A useful application of Fib numbers, brty.


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## motorway (3 January 2010)

Remember it is about RATIOS not so much the NUMBERS or THE STEPS

change the STEPS
eg
1 2 3 5 8 13

5 10 15 25 40 

and you are defining different rates of COMPOUND INTEREST


http://www.pricetime.net/F_INTRO_expcurves_2004.html

those steps can be any interval



> Nature isn't trying to use the Fibonacci numbers: they are appearing as a by-product of a deeper physical process.  That is why the spirals are imperfect.






> The race to derive Euclid’s φ value from principle is justified, but misdirected. It is justified
> because the proportions that resemble φ occur around us in very large numbers. This means that the
> emergence of designs with φ-like proportions is a natural phenomenon. A natural phenomenon
> obeys the laws of nature, i.e. the laws of physics. Faced with an unexplained phenomenon, the
> ...




OK ___> 







> "For a finite-size (flow) system to persist in time (to live), its configuration must evolve such that it provides easier access to the imposed currents that flow through it."




A finite flow could be a trend in a STOCK PRICE. For that TREND to 







> persist in time (to live), its configuration must evolve such that it provides easier access to the imposed currents that flow through it.




easier access is about PARTICIPATION..



> a Fibonacci series is an exponential growth function




TRENDS are a growth function

Now not too HOT not too COLD
BUT JUST RIGHT-->  =  GOLDEN

It is about PROBABILITIES unfolding in a way that attracts PARTICIPATION

Not about MAGIC NUMBERS




Motorway


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## Garpal Gumnut (3 January 2010)

The son of Bonacci's numbers are indeed ratios, which apply in nature as we know it.

This is the big difference between fib ratios and other thought numbers. 

Fib numbers can be accurately and simply measured objectively.

A good link for all.

http://goldennumber.net/hand.htm



> Your hand shows Phi and the Fibonacci Series
> 
> There are many examples of the Divine Proportion found throughout the design of the universe and everything in it, but let's take a look at one of the most important things first: You!   We'll need a few Golden Section / Fibonacci building blocks:
> 
> ...




gg


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## SmellyTerror (5 January 2010)

Not accurate or objective.

Take the finger example right there. Natural variation between people already blows the exact proportion out of the water. I just measured my index finger digits: 2.2cm, 2.4cm, 3.8cm. So that's a ratio of 1.09 and 1.58. I'm afraid the Smelly Terrible ratio is going to be different to the fibonacci one. I wonder if I can trade it? (*)

And I'm not freakish-lookin'. My fingers aren't all mishappen and deformed. I suggest the folk at home measure, too, and see what they come up with.

Regarding further "fibonacci in nature" stuff, please see here: http://www.lhup.edu/~dsimanek/pseudo/fibonacc.htm

So it's not in nature at all, really. No more than any other arbitrary ratio you care to name.

(*) Thing is, I probably could. As I said, IMO it's money management (exit rules and position sizing) that makes money, and entries informed by a lot of processing going on in the back of the head that no-one can teach. Most people's entry systems are just for scraps and comfort as far as I can see. Better than random, maybe, but not by a lot.

Dumbo feathers.


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## Garpal Gumnut (8 January 2010)

SmellyTerror said:


> Not accurate or objective.
> 
> Take the finger example right there. Natural variation between people already blows the exact proportion out of the water. I just measured my index finger digits: 2.2cm, 2.4cm, 3.8cm. So that's a ratio of 1.09 and 1.58. I'm afraid the Smelly Terrible ratio is going to be different to the fibonacci one. I wonder if I can trade it? (*)
> 
> ...




I doubt if you have measured properly.

Get an xray done and measure it again.

If not I'd get dna testing , just in case, or a check up.

gg


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## SmellyTerror (8 January 2010)

1. First, obviously, even if the finger thing above was right, it's still wrong. See, from the proportions you're giving: 3/2 = 1.5. 5/3 = 1.66. 8/5 = 1.6.

None of them are the golden ratio, and they're ALL DIFFERENT.

2. Second, honestly, people are different. We're not all built to the same spec. Here, have a squiz: http://images.google.com.au/images?hl=en&q=hand x-ray&um=1&ie=UTF-8&sa=N&tab=wi&safe=active

Get out your ruler, bring up some images, and see if the 2, 3, 5, 8 ratio holds.

It doesn't.

Here's a nice one from the first page of results (hope this isn't too big, here's the link if I need to delete it: http://www.newswise.com/images/uploads/2008/03/28/fullsize/hand_xray.jpg):




By my ruler and screeen resolution, the index finger digit proprtions are: 1.6 : 2.2 : 3.7 : 6.9. Which equates to proportions:
1.375
1.687
1.865

See any golden ratios in there?

If you think you hold a mystical key to the universe, you're probably wrong. It's not even hard to check, if you could be bothered. :


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## Timmy (8 January 2010)

SmellyT, something I just noticed from that X-ray.  

Each finger appears to have 4 bones.  
Yet the thumb, the essential, opposable, thumb, has 3 
... a Fibonacci number.  
Spooky.


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## Timmy (8 January 2010)

And in The Simpsons,
each character has four fingers.

But those with 2 hands (2, get it, Fib again) the total is 8 ... 
and there is Fibonacci again. 

It is time for my lie down now, so will have to go. :


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## Wysiwyg (8 January 2010)

Timmy said:


> SmellyT, something I just noticed from that X-ray.
> 
> Each finger appears to have 4 bones.
> Yet the thumb, the essential, opposable, thumb, has 3
> ...






Timmy said:


> And in The Simpsons,
> each character has four fingers.
> 
> But those with 2 hands (2, get it, Fib again) the total is 8 ...
> ...




Aye, there be wisdom.


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## Garpal Gumnut (8 January 2010)

SmellyTerror said:


> 1. First, obviously, even if the finger thing above was right, it's still wrong. See, from the proportions you're giving: 3/2 = 1.5. 5/3 = 1.66. 8/5 = 1.6.
> 
> None of them are the golden ratio, and they're ALL DIFFERENT.
> 
> ...




.375 , .687 and .865 are quite signficant numbers in Fibonnaci theory.

You are a human, or near enough, so don't waste money on dna or checkups.

gg.


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## SmellyTerror (8 January 2010)

> You are a human, or near enough, so don't waste money on dna or checkups.




I'm going to need that on a certificate. Sometimes my wife expresses doubts.


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## Garpal Gumnut (8 January 2010)

SmellyTerror said:


> I'm going to need that on a certificate. Sometimes my wife expresses doubts.




lol 

gg


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## Sir Osisofliver (5 February 2010)

SmellyTerror said:


> 1. First, obviously, even if the finger thing above was right, it's still wrong. See, from the proportions you're giving: 3/2 = 1.5. 5/3 = 1.66. 8/5 = 1.6.
> 
> None of them are the golden ratio, and they're ALL DIFFERENT.
> 
> ...




Hi Smelly,

I just wanted to make a quick post. In doing so I just wanted to help open you up to a possibility you may not have considered. 

The market is an expression of the aggregate viewpoint of all of it's participants.

What you say above is true, _individuals_ have some level of variation away from these ratio's. How could they not? If they didn't we would all look alike. When you take a number of individuals however and aggregate the results... You get _very very_ close to fib ratio's. The more people you include...the closer you get.

When we deal with the market, we are dealing with aggregates - not individuals.

Cheers

SIR O


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## SmellyTerror (6 February 2010)

A good point, and well made.

But we're looking at figner bones because they come kinda close to Fib numbers. What if we looked at ribs, or ear-lobes, or scrotum wrinkles? Look long enough and you'll find _something_ close to Fib ratios. I could make up a completely bogus ratio and look long enough to find examples of it in nature. And in trading. 

That's what I mean when I agree it's a myth.

What particularly gets my goat, I think, is the precision of the numbers. In science, if you go to a certain number of significant figures, you are saying something about how precise your measurement or calculation is: 6.00 is a lot different to just plain ol' 6. so when I see 1.61804 buzzing about, I can't help but sneer. You've gone 6 significant figures. You don't get to use the word "about" any more. :

Again, I agree that there is a certain amount of movement is a price that will make people stand back a moment to reconsider, and that might make a turn. But Fib ratios' relationship to that rough area is purely coincidental IMO. There's nothing magic or especially significant about the numbers themselves, and a lot of the guff (shells, finger bones, proportion of happy bible stories to vengeful bibles stories) around it is either irellevant or wrong. 

It's not the practice of Fib, as I've seen it done, that's a myth, because a general desciptor of crowd behaviour at particular ranges is useful ("retracement" is a useful concept, and an idea like "about _that_ much movement means _this_ is likely" is easier to track and discuss with numbers appended). 

Rather, it's the stuff surrounding these particular numbers that is a myth. They're not magic. The universe doesn't particulary care about them. You could just as easily use a lot of different ratios.

Look long enough and you'll find any number at all.


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## Sir Osisofliver (8 February 2010)

SmellyTerror said:


> A good point, and well made.
> 
> But we're looking at finger bones because they come kinda close to Fib numbers. What if we looked at ribs, or ear-lobes, or scrotum wrinkles? Look long enough and you'll find _something_ close to Fib ratios. I could make up a completely bogus ratio and look long enough to find examples of it in nature. And in trading.




Yes you could. Anyone can make a number series and then find examples to justify them.  The question of the relevance of these ratio's (and their apllicability to trading) therefore is a question of how _frequently_ they appear. If they appear frequently enough to be beyond co-incidence then they are relevant, and the examples of finger bones, facial features, shell or scrotum sack wrinkles is merely an expression of how frequently they are found in nature. (Or how frequently they are found in share charts).  Have you ever wondered however *why* they are found so frequently? 







> That's what I mean when I agree it's a myth.
> 
> What particularly gets my goat, I think, is the precision of the numbers. In science, if you go to a certain number of significant figures, you are saying something about how precise your measurement or calculation is: 6.00 is a lot different to just plain ol' 6. so when I see 1.61804 buzzing about, I can't help but sneer. You've gone 6 significant figures. You don't get to use the word "about" any more. :




Are you aware that like Pi - the numbers that appear in Fib ratio's are irrational numbers? The numbers cannot be expressed as a fraction, they do not terminate, and they have no repeating series. EG 2.6666666666. So when we say 1.61804 it's just like saying Pi is 3.14159 - when the number continues indefinately.

Why is this important?

It's important because irrational number series are an expression of an emergent *chaotic* system. A choatic system (such as evolution for example) should produce chaotic results, yet Fib ratio's appear with significant frequency. (even allowing for _individual_ variation). So if you think that the share market is a system based on chaos... you need mathmatical tools based in chaotic systems analysis to read the emergent patterns. 

But chaotic systems analysis is by it's very nature chaotic. Here's a simple example. What's the probability that a tossed coin will land head or tails? You only have two choices that are equally probable so the answer is 50%. Now tell me what order those heads or tails will arrive in. I've gone from asking you a simple probability question to one involving chaos modelling. What tools can you use to try and answer that question?

This is why Technical Analysts use a buffer around the Fib Ratio's. It's an attempt to quantify in a simple and fast method what is very difficult if not impossible to quantify with our current mathmatical tools. By doing this however we increase the amount of "co-incidence" that occurs and further steep the tool in the realm of magic and soothsaying.



> Again, I agree that there is a certain amount of movement is a price that will make people stand back a moment to reconsider, and that might make a turn. But Fib ratios' relationship to that rough area is purely coincidental IMO. There's nothing magic or especially significant about the numbers themselves, and a lot of the guff (shells, finger bones, proportion of happy bible stories to vengeful bibles stories) around it is either irellevant or wrong.



 I'm not trying to convince you that Fib ratios are the be all and end all of technical indicators. To be a successful trader you have to use what works for you and if you think that Fib has no value or is based purely upon co-incidence... don't use it. I disagree however that there is nothing significant about the numbers.







> It's not the practice of Fib, as I've seen it done, that's a myth, because a general desciptor of crowd behaviour at particular ranges is useful ("retracement" is a useful concept, and an idea like "about _that_ much movement means _this_ is likely" is easier to track and discuss with numbers appended).
> 
> Rather, it's the stuff surrounding these particular numbers that is a myth. They're not magic. The universe doesn't particulary care about them. You could just as easily use a lot of different ratios.
> 
> Look long enough and you'll find any number at all.




I don't believe in magic. I don't think the universe is capable of having emotions, but that ratio *is* emergent in chaotic systems for a reason. It's just not a well understood reason because we don't understand chaotic systems all that well.

Cheers

Sir O


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