Fibonacci levels: myth or reality? - page 16
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I beg to differ.
TA is a set of methods (mostly probabilistic-statistical), but ANALYSIS.
And the sections of mathematics that underpin it are also pseudoscientific?
;)
I wonder why you are picking on fibs?
You might as well pick on any method of technical analysis. The result will ALWAYS be 50x50 or worse. With any method.
On the other hand, there are people who successfully apply both fibs and other methods of technical analysis.
If it were that simple, there would not be heated discussions of any topic. But there are a lot of heated discussions. And what do they turn out to be?
The same as in this thread.
There are people who cannot use fibs. Most of them. So what of it? To their inability to sum up the fundamental theories, so that everyone around them will take their side?
In general, the attempt to bind everyone to one belief often does not lead to good.
So don't do it.
And the topic is not slammed. There is simply no point in pouring over nothing into nothing. It's better to just silently grind the markets with the methods that are close, whether it's phibs or something else.
What I can agree with is that it's hard to automate a system using fibs. Handhelds are great, but automation is not yet amenable.
I wonder why you are picking on fibs?
You might as well pick on any method of technical analysis. The result will ALWAYS be 50x50 or worse. With any method.
On the other hand, there are people who successfully apply both fibs and other methods of technical analysis.
If it were that simple, there would not be heated discussions of any topic. But there are a lot of heated discussions. And what do they turn out to be?
The same as in this thread.
There are people who cannot use fibs. Most of them. So what of it? To their inability to sum up the fundamental theories, so that everyone around them will take their side?
In general, the attempt to bind everyone to one belief often does not lead to good.
So don't do it.
And the topic is not slammed. There is simply no point in pouring over nothing into nothing. It's better to just silently mulch the markets with the methods that are close, whether it's phibs or something else.
What I can agree with is that it's hard to automate a system using fibs. Handhelds are great, but automation is not yet amenable.
Shit. Don't ask why (although the thoughts are there) it - works. Why it doesn't work is clear. Exactly for the same reason for which the small is noticed and the big is ignored. Creatures without complexes - mollusks there, daisies, etc. - it's easier. They do not need to caulk their own brains! Their phoebes are marvellous to look at.
Fibos are an objective reality. When they - the fibs))) - don't work, it means they're not being built from there. Well, like if you climbed a third of the pyramid at Giza and then said: what is the golden ratio there - I measured it from there - no way! Or, having climbed up and torn off half of blue agave's branches (I felt like looking at the desert), I would argue, pulling needles and drinking tequila with tequila, that no, the shoots are not in Fibonacci's row...
Shit. Don't ask why (although the thoughts are there) it - works. Why it doesn't work is clear. Exactly for the same reason for which the small is noticed and the big is ignored. Creatures without complexes - mollusks there, daisies, etc. - it's easier. They do not need to caulk their own brains! Their phoebes are marvellous to look at.
I like the way Akelo explains the performance of the fibo, based only on the discreteness of the price increment http://forex.kbpauk.ru/showflat.php/Cat/0/Number/5845/an/0/page/0#Post5845
The author of the thread is the only one who has given an argument for his claim. The rest are blah, blah, blah....
The question of the existence of any levels at all has been investigated, not Fibo specifically. The result showed that such levels simply do not exist, whence, in particular, follows the non-existence of Fibo levels.
Let everyone remember where he learned about the magic Fibo levels. It must have occurred to anyone that perhaps there are some levels. It was adequate to check this hypothesis at once by the author's method, from where to discard this idea. But few people seem to have done such research.
I agree, the author has completely simplified, but the logic is metallic. Take different periods, build not 2D, but 3D graphs, where on the third coordinate will be the minimum step for the zigzag and look at the result.
Someone started talking about Fibo and golden sections and everyone took it for granted. Here are the lined charts of individual cases. The profit does not depend on the number of lines.
People are acting strangely:
They hear about Khrenovsky's method, that it works for someone else, and start making this method work for themselves. And almost no one can reasonably say whether it is nonsense or not.
After all, Fibo is a simple statement, but inflated....
This is where I disagree with you. About the non-existence of (horizontal) levels, per se. First of all, we need to understand what a horizontal level is. For me, a horizontal level is a bounce of prices from a certain price at least twice. And what is a bounce is someone's trades that moved the price and the bounce that we see on the chart took place. The example is shown in Figure 1.
Why are levels drawn? Because someone in the market at the moment the price is interesting to sell or buy. Now why a bounce may occur two or more times. Because there are large players in the market who enter the market and change the prices. Do you really think that one or more players cannot enter the market two or more times at the same price, resulting in a horizontal level. If you don't understand that, then you can't see further than your nose. And because they are working in large amounts, there are inevitably changes in price. Now the biggest question? How do they big players enter the market at the same price? Because there is no interest in entering the market at a price range. Only at the expense of the opposing side. That is, in order for the seller to gain a position, the buyer is needed and in order for the buyer to enter the market, the seller is needed. It is our orders that have no effect on the price (for many reasons). Now why the levels that are visible in the past will not work in the present? First, the market does not like the past. Secondly, a closing sell is a buy, and a closing buy is a sell. And there are no angrier sellers than bulls locking in profit!!!!! And there are no angrier buyers than bears locking in a profit. Well, imagine the picture: you have levels drawn on the past movement and you watch the current movement in the opposite direction and see if price sees your levels. If those who are sitting in profit decide to fix it, no one will see your levels ("angry buyers, angry sellers"). And in the market there are always some who are in profit and some who are in loss. Therefore, statistics will not help here!!!!!!!! It will crumble into impermanence and the MARKET MECHANICS, which many people sometimes do not see. There is an anecdote: An investor comes to the stock exchange, looks at a stock. He finds a stock that has been worth less than a dollar for a very long time. He gives a buy order to a broker for a huge amount of money. Broker executes it. THE PRICE GOES UP!!!!!! The investor happily shouts to the broker: "SELL!!!". And the broker says to him: "To whom?????".
gpwr:
I decided the other day to check how often Fibonacci levels occur in forex using EURUSD over the last 10 years. All calculations in the program are based on the zig-zag.
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Method 1. Calculates the percentage ratio of the height of each leg of the zig-zag relative to the height of the previous leg:
100% * MathAbs((zz[i]-zz[i-1])/(zz[i-1]-zz[i-2]))
Frequency histogram: Constructed a histogram expecting peaks of 23.6%, 38.2%, 50%, 61.8%, 76.4%, 100%, 127.2%, etc. What I got was this.
There are pronounced sharp peaks at 100% and 200% muves and a smoother peak at 84%. The histogram itself looks like a Poisson distribution.
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Method 2. Plots two zigzags: a fast one (dark blue) and a slow one (light blue). Fibonacci levels are reported from the slow zig-zag forward into the future. The statistics are collected from the ends of a fast zig-zag, for which levels are drawn.
There is a peak at 37%, which is close to the Fibonacci 38.2% level. But in general, Fibonacci levels work just as well as randomly chosen levels.
My personal opinion: Fibonacci levels in forex are a myth.
Despite the fact that "The histogram itself looks like a Poisson distribution", the bounces follow the Fibonacci numbers :)
...comparison of real Fibonacci numbers and the "Fibonacci number ratio difference"