[NEW FEATURE] Live Signals on CT 2.0 I want to take a look now! Close
Open
Page 1 of 2 12 LastLast
Results 1 to 10 of 16
  1. #1
    Administrator Martin Kay's Avatar

    The Fibonacci Tool - To use or not to use !!!

    The Fibonacci tool is a must have tool for every beginner, but can it really identify the trend?

    Tell us about your exprience with the Fibonacci tool

    Originally posted by Bogdan G. For the full article click here.

    Why doesn’t the Fibonacci Tool suck?

    Fibonacci levels are one of the most commonly used technical analysis tools around the world. Due to the multitude of traders using them, the Fibonacci levels become self fulfilling to some extent. If a big enough number of traders trade the same way at a certain level, they will move the market in that direction. To make them even more accurate, you could use them in combination with trend lines: if in a trend price retraces to the trend line and that point happens to coincide with a Fibonacci level, the probability of us making some dough increases dramatically.

    Why does the Fibonacci Tool suck?

    I told you earlier that we must identify a swing high and a swing low. Well, here the discretion of every trader comes into play. I might see the swing high or low differently than a trader living in Binarnia and this will give us different Fibonacci levels. Obviously, one of us will fail; the dreams of wealth and easy life will go up in smoke, the Fib will be thrown away and never used again. If used correctly, this tool can bring lots of profits, but subjectivity is a big drawback. And it has another one: Fib levels are S/R levels and these are bound to fail eventually. Every S/R level will be broken; if that wouldn’t happen, market would just move in a sideway channel.

  2. #2
    Master Member Bogdan G's Avatar
    What I really don't like about Fibs is their subjectivity. Even the same trader can analyze swings differently in different situations. Ten traders will have maybe 10 different views on Fib levels. If used as a confirmation and not primary trading signal, they are good.

  3. #3
    Senior Member Grae's Avatar
    Oh Fibonacci. I love this guy! And his idea.

    The tool is a must learn for traders. And with practise, you could actually make your own retracements with some accuracy. Statistically, Fibonacci is a pattern that occurs in nature. So they are to a large extent very dependable.
    To be more spot on, Bodgan G, Have you analyzed the retracements superimposed on prevailing trends?

  4. #4
    Rookie Member
    This is a great tool. I am reading more reviews on it. Anyway i like that name Fibonacci......
    the user interface look a bit complicated for a newbie. Not really for me i can handle it but i am just saying that because the Newbie might find it a bit hard to use,.

    Really a great tool to have in the arsenal though.

  5. #5
    Master Member Bogdan G's Avatar
    Quote Originally Posted by Grae View Post
    Oh Fibonacci. I love this guy! And his idea.

    The tool is a must learn for traders. And with practise, you could actually make your own retracements with some accuracy. Statistically, Fibonacci is a pattern that occurs in nature. So they are to a large extent very dependable.
    To be more spot on, Bodgan G, Have you analyzed the retracements superimposed on prevailing trends?
    Hi Grae,
    I don't really understand what are you referring to when u say "you could actually make your own retracements with some accuracy". Do u by any chance mean calculate them visually? Although there is no meaning in that, I can do it with some accuracy, just by looking at the chart.
    About retracements superimposed on prevailing trends: the Fib retracement is supposed to be used on swings in a trend so by definition, you have to superimpose them on the prevailing trend. Of course, this is where more subjectivity comes into play: which one is the prevailing trend? The truth is that price is trending 100 percent of the time. The problem is that we don't know on which time frame.
    All the best man, have a nice weekend.
    Bogdan

  6. #6
    Master Member Bogdan G's Avatar
    Quote Originally Posted by bitterB View Post
    This is a great tool. I am reading more reviews on it. Anyway i like that name Fibonacci......
    the user interface look a bit complicated for a newbie. Not really for me i can handle it but i am just saying that because the Newbie might find it a bit hard to use,.

    Really a great tool to have in the arsenal though.
    Um,... what user interface click - drag - release mouse button If there are requests i will definitely do a step by step tutorial on how to plot them on a MT4 chart.
    Guys, have a nice weekend and all the best
    Bogdan

  7. #7
    Senior Member Grae's Avatar
    Hi Bogdan.

    Yeah, you can visually just look at the retracements even just on the weekly (clearer). And generally have an idea of the support and resistance levels. I normally look at the 4 hour and 1 day time frames to check my trends. So if my trend is bullish, I can pick my retracements based on the next highs(noting that its a prediction and markets swing). But the candles can also alert you of impending swings. Plus ADX etc.


    Enjoy.

  8. #8
    Master Member Bogdan G's Avatar
    Quote Originally Posted by Grae View Post
    Hi Bogdan.

    Yeah, you can visually just look at the retracements even just on the weekly (clearer). And generally have an idea of the support and resistance levels. I normally look at the 4 hour and 1 day time frames to check my trends. So if my trend is bullish, I can pick my retracements based on the next highs(noting that its a prediction and markets swing). But the candles can also alert you of impending swings. Plus ADX etc.
    Enjoy.
    Hi Grae,
    You are right, candles, especially Japanese ones tell a great story. I usually take a trade if I see Pins or engulfing candles on Fib levels during the retracement of a good trend. That way, i am trading with the trend and with confirmation from 2 important tools, Fibs and candlestick formations.

    All the best

  9. #9
    Veteran Member Ammeo's Avatar
    i personally dont use it cause i avoid too many indicators on my charts...i trade S/R levels combined with 50 and 200 DMAs ..sometimes RSI or MACD aswell (bt not always) ...bt i have seen many traders use them to their good.....

  10. #10
    Senior Member Grae's Avatar
    Quote Originally Posted by Ammeo View Post
    i personally dont use it cause i avoid too many indicators on my charts...i trade S/R levels combined with 50 and 200 DMAs ..sometimes RSI or MACD aswell (bt not always) ...bt i have seen many traders use them to their good.....
    The daily moving averages are good. Ok. S/R actually play to fibonacci levels without the drama of additional tools,you can tell where the market has been before on S/R levels.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
3