Making sense of how to see the fibonacci points
My opinion: Fibs don't work often enough to make them a worthwhile indicator.
dinkledorfer:
I don't know how many other people have struggled with Fibonacci? I tried buying videos, scanning for tutorials online............the whole mess and still, understanding them evaded me! I kept hearing how accurate they could be and that they were so easy to see. For me, none of that worked! I just couldn't figure it out until now. Here is how I finally "saw them. The results of this have turned into a Fib system that I will be forward testing this week.I began by bringing up volume so I could see where the best spot to work was. With the GBP/USD pair, that was 0900-1900 on the MT4 platform. Once I marked the best volume period, it was time to look for places where price leveled. Every place it did, I placed a mark.Then a MACD 8.13.9 was added to see how things lined up. I added lines on this contact points so I could clearly see it on the secondary windows. It was uncanny how they lined up with the tops and bottoms of the cycles in the MACD. but some points didn't fit and I didn't know why? Once I began applying the Fibs to the points where both the MACD and price levels agreed, it all fell into place. The places they did not agree, turned out to be resting points where the Fib movement was not yet complete. This also helped me to see failed Fibs and 90% of these occurred when in a lower volume period.I noticed that sometimes, the indicator would simply go flat first, then actually change direction. I think you have to pay attention to anything that says "something is changing".This idea was back tested over 5 days, focusing on the best volume periods and it worked like a charm. I could draw the Fib, and look to the MACD to peak at a Fib level. There were spots where price rested but the MACD told me it was not done so I looked to stay in that trade until they agreed. Doing it this way, The MACD also helped me see when a Fib was failing and a trend reversal could be forming. I've read so many times that you need to use other indicators to help confirm things. So others were added to see if I could get confirmation from others. It took a little tweaking but it worked.Knowing where the fib points now were, I brought other indicators onto the chart, one at a time, looking for certain telling behavior at or near the Fib levels. These are the ones I added:Bulls and bears: This indicator seems to like to go from one end of the scale to the other and it told me if things were going to move as expected at the Fib point. If I expected a retrace at that point, I would be looking for the indicator to show me that. (Default setting)Next was RVI. RVI can be a screwy one but when you look at it as a tool, used to see turning points at Fib levels, it works rather nicely. I have this set to 3 periods.(not the default) Next was a standard stochastic which also told me when a change was taking place at the projected Fib levels. (Default settings)CCI was next. Again, it helped to show where things were starting to reverse. (Default settings)Money flow was next added and that helped to show me how the bigger money was thinking at the Fib points. (Setting 10 periods)Finally, volume was added. Someone on a forum made the remark that there tended to be a volume spike and then a drop at the Fib turning points. This turned out to also be true.I'm still trying to decide on stop loss levels and what should make me too nervous to stay in a trade.Plot it all out on a back testing and see if you see the same things I do? I will be forward testing the idea this week to see how it works once I get my emotions into the game. Much as we are told to keep them out, I have not been able to. SO testing it forward, I can see if my emotions screw things up or the plan will make enough sense as to keep them in check. Any comments and tweak suggestions would be appreciated!
I don't know how many other people have struggled with Fibonacci? I tried buying videos, scanning for tutorials online............the whole mess and still, understanding them evaded me! I kept hearing how accurate they could be and that they were so easy to see. For me, none of that worked! I just couldn't figure it out until now. Here is how I finally "saw them. The results of this have turned into a Fib system that I will be forward testing this week.I began by bringing up volume so I could see where the best spot to work was. With the GBP/USD pair, that was 0900-1900 on the MT4 platform. Once I marked the best volume period, it was time to look for places where price leveled. Every place it did, I placed a mark.Then a MACD 8.13.9 was added to see how things lined up. I added lines on this contact points so I could clearly see it on the secondary windows. It was uncanny how they lined up with the tops and bottoms of the cycles in the MACD. but some points didn't fit and I didn't know why? Once I began applying the Fibs to the points where both the MACD and price levels agreed, it all fell into place. The places they did not agree, turned out to be resting points where the Fib movement was not yet complete. This also helped me to see failed Fibs and 90% of these occurred when in a lower volume period.I noticed that sometimes, the indicator would simply go flat first, then actually change direction. I think you have to pay attention to anything that says "something is changing".This idea was back tested over 5 days, focusing on the best volume periods and it worked like a charm. I could draw the Fib, and look to the MACD to peak at a Fib level. There were spots where price rested but the MACD told me it was not done so I looked to stay in that trade until they agreed. Doing it this way, The MACD also helped me see when a Fib was failing and a trend reversal could be forming. I've read so many times that you need to use other indicators to help confirm things. So others were added to see if I could get confirmation from others. It took a little tweaking but it worked.Knowing where the fib points now were, I brought other indicators onto the chart, one at a time, looking for certain telling behavior at or near the Fib levels. These are the ones I added:Bulls and bears: This indicator seems to like to go from one end of the scale to the other and it told me if things were going to move as expected at the Fib point. If I expected a retrace at that point, I would be looking for the indicator to show me that. (Default setting)Next was RVI. RVI can be a screwy one but when you look at it as a tool, used to see turning points at Fib levels, it works rather nicely. I have this set to 3 periods.(not the default) Next was a standard stochastic which also told me when a change was taking place at the projected Fib levels. (Default settings)CCI was next. Again, it helped to show where things were starting to reverse. (Default settings)Money flow was next added and that helped to show me how the bigger money was thinking at the Fib points. (Setting 10 periods)Finally, volume was added. Someone on a forum made the remark that there tended to be a volume spike and then a drop at the Fib turning points. This turned out to also be true.I'm still trying to decide on stop loss levels and what should make me too nervous to stay in a trade.Plot it all out on a back testing and see if you see the same things I do? I will be forward testing the idea this week to see how it works once I get my emotions into the game. Much as we are told to keep them out, I have not been able to. SO testing it forward, I can see if my emotions screw things up or the plan will make enough sense as to keep them in check. Any comments and tweak suggestions would be appreciated!
Hello,
Try using multiple time periods strategy, once higher charts agree go into the trade... fibonacci is accurate if you use multiple charts. 
ajb27:
My opinion: Fibs don't work often enough to make them a worthwhile indicator.
My opinion: Fibs don't work often enough to make them a worthwhile indicator.
fibonacci are the basics of the market movements to the pip. moving averages and trend lines are a simplified inaccurate replacement of the fibonacci. while most other indicators are useless lagging indicators.
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I don't know how many other people have struggled with Fibonacci? I tried buying videos, scanning for tutorials online............the whole mess and still, understanding them evaded me! I kept hearing how accurate they could be and that they were so easy to see. For me, none of that worked! I just couldn't figure it out until now. Here is how I finally "saw them. The results of this have turned into a Fib system that I will be forward testing this week.
I began by bringing up volume so I could see where the best spot to work was. With the GBP/USD pair, that was 0900-1900 on the MT4 platform. Once I marked the best volume period, it was time to look for places where price leveled. Every place it did, I placed a mark.
Then a MACD 8.13.9 was added to see how things lined up. I added lines on this contact points so I could clearly see it on the secondary windows. It was uncanny how they lined up with the tops and bottoms of the cycles in the MACD. but some points didn't fit and I didn't know why?
Once I began applying the Fibs to the points where both the MACD and price levels agreed, it all fell into place. The places they did not agree, turned out to be resting points where the Fib movement was not yet complete. This also helped me to see failed Fibs and 90% of these occurred when in a lower volume period.
I noticed that sometimes, the indicator would simply go flat first, then actually change direction. I think you have to pay attention to anything that says "something is changing".
This idea was back tested over 5 days, focusing on the best volume periods and it worked like a charm. I could draw the Fib, and look to the MACD to peak at a Fib level. There were spots where price rested but the MACD told me it was not done so I looked to stay in that trade until they agreed. Doing it this way, The MACD also helped me see when a Fib was failing and a trend reversal could be forming.
I've read so many times that you need to use other indicators to help confirm things. So others were added to see if I could get confirmation from others. It took a little tweaking but it worked.
Knowing where the fib points now were, I brought other indicators onto the chart, one at a time, looking for certain telling behavior at or near the Fib levels. These are the ones I added:
Bulls and bears: This indicator seems to like to go from one end of the scale to the other and it told me if things were going to move as expected at the Fib point. If I expected a retrace at that point, I would be looking for the indicator to show me that. (Default setting)
Next was RVI. RVI can be a screwy one but when you look at it as a tool, used to see turning points at Fib levels, it works rather nicely. I have this set to 3 periods.(not the default)
Next was a standard stochastic which also told me when a change was taking place at the projected Fib levels. (Default settings)
CCI was next. Again, it helped to show where things were starting to reverse. (Default settings)
Money flow was next added and that helped to show me how the bigger money was thinking at the Fib points. (Setting 10 periods)
Finally, volume was added. Someone on a forum made the remark that there tended to be a volume spike and then a drop at the Fib turning points. This turned out to also be true.
I'm still trying to decide on stop loss levels and what should make me too nervous to stay in a trade.
Plot it all out on a back testing and see if you see the same things I do? I will be forward testing the idea this week to see how it works once I get my emotions into the game. Much as we are told to keep them out, I have not been able to. SO testing it forward, I can see if my emotions screw things up or the plan will make enough sense as to keep them in check.
Any comments and tweak suggestions would be appreciated!