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Trading Fibonacci numbers

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I'm sure we have some idea of how to trade it.
I'm also sure there is a good reason why we don't trade it.

When ever your ready to post up 5 in real-time
With commentary.
You don't even have to be trading them.
Just demonstrate how you pick a top OR Bottom.
I'm expecting a fib level to coincide with a top at which point you'll enter a short after N Bars with a projected Profit target at a fib level which will occur after another N bars
and you'll probably place a stop -----
 

Nah dude. Back testing stepping through a chart manually is not back testing. And your swing points are only confirmed swing points well after they are set so therefore useless to a systematic backtest as per your claim. That is what I was wanting to see after you claimed that you had back tested proof - I was firstly wondering how you did it suspecting at best you had a coding error but you haven't actually back tested. So you are right there is no point discussing it. Because you haven't got any proof of it working.
 

WTF
I never claimed to pick tops or bottoms
I never said I trade or predict the future using N bars

Now I get it. You have assumed that I am claiming to predict the future? Nope. Never said that. You must have missed the part about waiting for CONFIRMATION before entering and MANAGING a trade with stop losses once in.

If thats what you think then you have no idea how to trade using Fib tools. FYI there is 179 books on Amazon if you want to learn about it.
 

No wrong again.

At sometime you must take a trade at that time you'll have decided that you have confirmation that that's a pivot high or a pivot low---this is what you have shown in hind site on the charts you have provided.

What I'm asking for is the EXACT point in real-time where you post a chart with commentary showing the Fib trade in detail from start to finish.

Now for an experienced fib trader like yourself that shouldn't be too hard---surely.

If that's what you think then you have no idea how to trade using Fib tools. FYI there is 179 books on Amazon if you want to learn about it.
Click to expand...

I probably wrote one of them.
 
tech/a said:
What I'm asking for is the EXACT point in real-time where you post a chart with commentary showing the Fib trade in detail from start to finish..
Click to expand...

Oh so what you are saying is that I am a liar and that the trades that I have posted were based on some other trading method and I am just pretending that I use Fib in my trading. Damn you caught me, I confess, I really trade by moon cycles with the help of my dart board. Shame on me. I guess I should also confess that I am not watching oil with Fib and swing charts, I am just waiting for the full moon. Oh and ignore everything I have written in the CCL thread, for that one I used Venus.
 

No not that either.
Just 5 trades start to finish in realtime.
Put up your next oil trade if you like.
Whenever your ready.
 
tech/a said:
Whenever your ready.
Click to expand...
Ok after watching and waiting for confirmation it just went live on Feb CL. Here's how it went.

Price hit resistance and rallied from 61% of first range, but the first break out bar finished under 38% and too close to 50% of the down range (2nd pic) so no point chasing it, wait to see where pullback forms.


Pull back started at just under 50% of most recent range down, and confirmed the run up as an expanding range so now looking for swing bottom on pullback. It confirmed above 50% of the last short run up adding strength to the move.



It is also above 50% of the first range (see first pic) adding weight to the strength of the move. It was also above the previous two swing highs. But it was only a slight swing up so waited to see what the next bar did. It closed just above 38% (see above) and took the swing higher. Price is above MMA and volatility is low so expected to rise. I want in now.





First check that 2:1 target fits, happy that it is at 61% and is within the 100% range projection (not drawn) with stop just below the swing bottom....I'm in at 97.95.



$99.15 at 50% will be danger point and time to tighten the stop, unless it powers through it, then stops can be just under it.

A lot of Fib and Gann saying oil should rally, so a perfect time for the nay sayers to go short.
 
The price went up through 50% but closed below it, so stops tightened to just below the 38% level at 97.16.

 
Here is the next one I am looking for.

The aud daily after turning around at 50% has just completed 100% of the range and looks like a double bottom.




So now check the weekly chart which shows the price may be headed to 50% (0.855). So on the daily chart I am looking for a swing top to form under 0.9146(38%) and will then take a short if I can get 2:1 before 0.855 (50%)

 
I don't trade Fibonacci numbers as such but their significance cannot be ignored especially when used in pattern following analysis.

Those familiar with Fibonacci will see the relationship of the retracement, expansion and extension on the daily chart of TLS.
(click to expand)
 

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I don't understand Fibonacci retracements. What it looks like to me is that you assume a stock will retrace back a certain percentage that is based on a generalisation of Fibonacci numbers then when that happens you use T/A to look at whether you can expect a reversal. At that point you choose to buy or to sell. The only way that this makes sense is if stocks have a reason to retrace back to those Fibonacci points. I can't see any reason why they would or should. In this sense, they are arbitrary.

Is there some reason why this should work? Even if there was some tendency for this to occur, there is a lot of noise traders and investors need to be aware of. News reports and companies announcements may send the market into a spin that destroys any usefulness of a technical indicator.
 

I don't understand something. At what point were you thinking of going long and decided not to? Why do you need fib numbers to figure out not to go long? Can't you just eye ball the chart and see it is in a downtrend and then not put your money in or do you mean you were considering going long before the down trend?
 

Yes the idea is that a stock will retrace by percentages as you say, and also that a stocks next move will occur in percentages of the previous move (projection).

Why, I have no idea. Our knucles are spaced at Fib ratios, so are our teeth, sea shells, spider webs, dear antlers. I dont know why I just accept that it is. Same for the markets, I just can see it is reliable, but the most reliable is the 50% level which is not a Fib number, its a Gann thing but most Fib tools have it.

The next 3 charts are xjo. Why did the average of 200 stocks top at 50% of the projected range, I dont know, but I knew 50% was coming so I stopped trading long just in case. When it confirmed as a top I only scanned for short trades and also shorted the spi. Why did the latest bounce occur again at 50%, I dont know. Why did the market stop its recovery at 50% of the gfc run down, I dont know.






I use it in two ways.

1. Its on the charts I watch, so for oil I was watching the 61% level - more on that later.
2. When I run a moving average scan, if I get a result then I use Fib to look for targets and possible resistance levels, so its used not to find an entry but to find a target and to see if the trade has room to move once a possible setup has been found.

So back to oil, in Oct it went straight through 50% so I started watching 61%, and it bounced, but days later bounced back from 50%.



It then formed a consolidation under 61%, so I wanted a break above that before going long. That happened, so I had a look at a possible long. I saw that if I placed stops under 61% and target just under 50%, it didnt provide 2:1 risk reward so I left it.




So next I wanted a pullback that would happen above 61% which it did as explained in previous post. 50% was still a worry but the swing bottom above 61% is a sign of strength that wasnt there before.

An of course now oil is struggling to close above 50%. Why I dont know, but its a good time to tighten stops just in case it becomes resistance again.

So Fib is not an entry, it's a look into possible problem points and is used for targets, stops and keeps me out of lot of trades.
 
Here's a few more from oil Spot V chart, and for me the more it has happened in the past, the more likely it will continue to work. But the key is to wait for confirmation.





and here is just one of those things. The current 50% problem level on the Feb chart just happens to also be the 38% point on the spotV chart of the last down range but also 50% on the spotV of the last major range up.

 
Thanks beachlife for taking the time to respond. I think I am going to have to look at a lot more charts. Given how many charts there are over many time frames for many different things then some are bound to follow any pattern. The important part is that if this happens a good more often then it should statistically over a large sample.

Has anyone ever used some sort of scans to backtest this over large sample sizes to rule out the possibility of selection bias and confirmation bias?
 

I keep pointing this out and I keep getting the same idiotic replies.

You cant.
You need to use the Zig Zag function.
The last leg is dynamic and cannot be set in stone until the % retracement or move forward is replaced by a move in the other direction --greater than the % nominated.
So any test will be in accurate.

Here is what Happens pretty well all the time when trading forward. (REALTIME)









 
People actually think it's a good idea to go long there? I just eye balled that first chart for a few seconds and thought it would be better to stay in cash. I think anything you do there given just that information on the chart is a gamble and there is not enough edge one way or the other. I can see why people lose money trying to use obscure signals.

I of course can be wrong and someone like you T/A might say "well obviously we short there" but I don't think this is the case. I think this is a situation where the risk/reward ratio just isn't there. It may be that if we zoomed out to the 3yr and 5yr weekly charts it may paint a different picture of a long term up trend that isn't shown there but given that 6 month chart alone, I don't think we can trade this stock profitably at the point we would be at in real time in the first chart.
 
Once again, the key is WAIT FOR CONFIRMATION.

Tech/a's example is clearly an example from someone that has no idea. When it appoaches 50% you wait for confirmation of the rally by a breaking of tops, and when it fails, and heads south, you go short when the bottoms are broken, and then you use stops because nothing is guaranteed 100% of the time.


As for back testing, by code not so easy, manually like we did before everyone could write code, no problem.
 

Ok I'll play
What do you look for for confirmation
First bar break up or down,
Second,third. Fourth
When do you take the trade
When is it confirmed
?
 

Breaking of tops? What tops? The major one... a minor pivot high? And likewise if price breaks a "top" then fails why would you go short". As in what analysis says it will trend lower?

Why not just show a live example with no hindsight? That would be good.

I.M.O trading purely Fibs will result in a $0.00 account balance eventually.
 
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