Getting through elementary school and just decided to skip the fibonacci section after the first two pages as it reads like completely arbitrary bullcrap. No explanation was given as to why it should work, nor proof. Googling yielded no answers either, we’re supposed to believe it’s legit because it sounds all mathematical and technical, basically.
I imagine it’s included in the school merely for completion sake, as there are people out there actually believing there’s some sort of logic to it. What I want to know is if there are any other similarly disposable topics in the course to watch out for? I caught this one but am afraid of being fooled by others.
All depends what suits you.
A lot of people, myself included, use hardly any indicators. Many follow pure price action, I use the 3 ducks system which had just 1 indicator.
I wont knock fib, it must work for some, but I like to keep it simple
Well Fibonacci are useful for finding market reversal zones. They often are showing levels of support and resistance.
It works. I am using it everyday and this is by far the best tool i have. Better than 1000+ indicators or anything else. The universe and the nature is based around those numbers so are people’s behaviors.
You need to know what an impulsion leg is in order to draw fibonacci retracements and extensions (by the way extensions are completely wrong in the babypips tutorials). Also if you can’t read a chart and know nothing about structure fibs are useless for you.
By the way if you want to learn something stick to the pipschool.
That’s basically the only thing that is useful here. Forums are full of crap and bull****.
In fact I am here to relax and waste my time because I don’t trade for the moment.
But winners don’t come here usually. You will have 95% of losers replying to you.
Saying how they are great and how stuff they know nothing about don’t work.
You are spot on, I think you’re skeptical mindset is exactly what you need to be successful.
A lot of technical analysis is like astrology, it suffers from confirmation bias and has no statistical evidence to support it.
The Fibonacci numbers hold no significance like the golden ratio. They can be found in all things in nature but so can all other numbers and ratios just as frequently.
Don’t dismiss the tool though! The tool itself is useful to measure your risk but the numbers they are made up. They offer no edge, you could replace them with your own. Say 30 or 70 for example. What the tool can do is help define entries, stops and take profits as set points with set risk ratios which is vital in my opinion.
Also I kid you not people trade with astrology and moon cycles. They swear by it, obviously they don’t make money but they say they do. A lot of people have all sorts of wacky beliefs.
Keep routed in the real world, remember what you are trading and what the graph is plotting. Currency value against another currencies value. Remember that and trade strong against weak and you’ll do fine.
The only way you’re wrong for ignoring the Fibonacci numbers is if professional traders, who actually have a real market effect, use them. If all of them are using them, you are missing the boat by not using them. For example, if they are taking profit at a Fibonacci level you are going to lose out by not because all of their sales will lower the price. Other than that you are right, obviously the numbers aren’t inherently magic, and if I remember correctly pipschool acknowledges that you should know the numbers solely because other traders use them.
This pretty much sums it up! Fibonacci and other technical indicators just serve as confirmation for trends or entries/exits, mostly because majority of traders look at those levels and usually has a self-fulfilling effect on the market. Analysis can only go so far in terms of predicting price action but it can help you score better odds of winning if you play them right and manage your risk properly.
Technical tools are just that. Test them, try them in different time frames and on different charts. Select what works with you and stick with it. Blaming a tool, or a tool designer, is like blaming a boat for sinking not the sailor. A skillful navigator can use any boat to survive the ocean. As Pipdiddy said, it is mostly all self fulfilling. No one can predict the market or the ocean, but we can estimate, and play with probabilities, and scenarios, all by using different tools to see things from different angles.
Best reply here.
And those telling Fibonacci are crap don’t really know what they are talking about.
If you watch you can clearly see that the market reacts to the ratios of the previous impulse leg.
And you know what that means? It means people are using it. A LOT of people
Use a 4H or daily timeframe draw a fibonacci retractment on a previous trend and you will see if its used but you have to use the tool you are the most comfortable with.
No, it’s not. Pick up any college-tier book on physics, calculus or statistics and you’ll see just how often the fibonacci series comes up (about close to never). It’s generally irrelevant/useless.
At least 95% of losers don’t know how to apply Fourier series to trading either. Or Taylor series, or Gaussian statistics, etc. Doesn’t mean they should.
Now this I can get behind. But are there really many high-volume traders using it? Searching around other forex guides there’s not much critic of the fib retracement, even though it’s mathematically ridiculous. Your argument which is the only valid one doesn’t pop up much either. This makes me think the traders on top have an active interest in keeping the rest ignorant and believing in hocus-pocus.
If you can’t read structure, and fibs are just confirming some structure possible reversals you know nothing about market and how it behaves. That’s what I was saying, a bunch of people having no idea what they are talking about.
The thing is Fibs are a tool. It’s okay if you don’t love it. But saying it does not work because you can’t use it nor you can understand it (probably because you’ve red a lot of bull**** about it pretty everywhere and that you will always will find a dude saying Fibonacci is **** in the same deal that you will always find dudes who say that trading is **** and that brokers steal your money)
Since when Fibonacci are mathematically ridiculous?
The only thing that is ridiculous is ignorance.
By the way stick to your stuff. I personally trade of fibs and structure and have very good results. You don’t want to use fibs it’s okay, just don’t say it does not work based on some kind of conspiracy theory.
With regards to Fibonacci: When looking for an entry or exit point it’s important to look at the charts contextually. I think Fibonacci forms part of that context along with pivot points, and the “big figures”, S&R levels, Price action etc etc.
I have seen Fibonacci work too often to discount it so i’m aware of the levels as i trade but i wouldn’t trade it blindly on it’s own or without context.
Yes one should never follow anything blindly, whatever it is.
The knowledge of structure (support/resistance) and fibs (because it shows possible supports resistances from a given Swing) is the best tool you would have with price action patterns.
Using indicators (and they are all lagging) makes you always late. While fibs, support resistance and price action gives you an advantage over indicators.
The first one is they don’t lag, in fact you can even see what will happen in advance.
They work on every chart where there are people involved.
So building a good strategy on those alone (in fact I am using the structure and fibs only) will yield you a very good results and you will be far before others. You just need to settle a good strategy and not following fibs or S/R blindly.
but you have to use the tool you are the most comfortable with.