So I’m trading/looking at the daily timeframe today, EURSUD. How do I plot fibonacci retracement ? How far back in time do I need to go ?
Do I go back days or weeks or months, or it doesn’t matter? At least for 2019,. there are several swing highs and lows to pick from. Do I just pick the most recent of either?
Thanks!
Completely subjective - Fibs are areas or lines where we look to see if the market will turn or at least stop/pause.
By definition therefore it is a pick bottom/top scenario which is also by definition hindsight - did the fib hold or not.
Fibs are supposed to represent the level that a ‘move’ may retrace to before continuance.
Trend lines are not dissimilar - check these out on Eur/Usd daily:
The lines look pretty, but imagine you are on a trade within one of those daily candles - not much good except in hindsight.
There is one fib level that is not subjective, it’s not really a fib, it’s just a level that’s easy to work out.
Yesterday was a ‘move’ day - an exaggerated move down greater than the recent norm - that’s the relevant move that the fib will look to evaluate any pullback/retracement.
Look at today’s candle, maybe put yesterday and today on hr1 and place that fib:
The fib level that’s not a fib:
Price levels are more important for discovering probabilities than Fibonacci.
It would seem that most that use and teach them successfully use a daily chart.
Maybe down to 4H, and out to a weekly.
Fibo levels are supposed to be plotted from swing high to low and vice versa.
As you have already discovered, which swing high and low to use is subjective. Due to the fractal nature of the market swing highs and lows exist within larger swing highs and lows that exist over many time frames.
Some traders use swing highs and lows on different times frames simultaneously, and look for areas of confluence.
I hope this helps.
Fibs are just another distraction for you to obscure your chart with.
If you draw them on every swing in history, you’ll see that price pays them no attention whatsoever for the most part.
Every once in a while, one will bounce price, and the forums will be buzzing with fib protagonists announcing how wonderful this tool is.
Price moves from zone to zone, not naturally, but artificially. These zones are created by people. These zones are easiest seen on a naked chart. That’s why your brokers offer you so many ways to hide price from you.
Fibonacci is for people who don’t know how to read a chart. They guess where price might turn even though the chart tells you. For most its easier to put a retracement than learn because that takes effort.
Couldn’t this be said about anything that is draw? Like trends lines. Traders see price getting near to or about to break through, and then set their trades up. And the institutions and smarter-than-newb traders know the newbie mentality of looking at those places or levels and place their own trades. So I would think traders pay attention. Fibs are just another thing. If enough people use them and that use affects their trade setups, then aren’t they at least somewhat beneficial?
Nope. Price moves because banks and institutions. Retail traders like you and me cannot move the market. So tell me what the logic is in thinking that price will react on a trend line just because retail traders placed buy/sell orders there? Well actually price can react there. When banks want to stop you out ! Banks trade supply demand and have no interest in fibs. By trading all the known popular indicatorsbl you are joining the herd and finding trades in the same places as other retail traders. In other words trading against the banks. When you sell the banks buy. Instead you should be buying when the banks buy. I will give you some top info on trend lines most people will never attempted to understand. Trend lines form as an outcome of supply and demand. When you have a fresh demand zone and price move away from it, then next time price comes back the will be left over demand. This means as price enters into this demand zone with lack of supply price can turn and rise again. This process occurring over and over again looks like what? A trend line! Once the demand is all gone from that zone supply will overcome demand and break to the downside. So this is the only reason trend lines form. They are not magic and banks do not make them on purpose. My advise is not to follow popular trading systems. You become a easy target.
Interesting to read everyones replys
The ITs who run the market often look like they use supply and demand, but back when I was an SD trader, more often than not I’d find that my stop would get taken, just beyond SD, exactly where price turned my way. It happens to all SD traders, and is very telling.
SD is just another trap, luring the unsuspecting into a false sense of understanding and an inevitable margin call.
I’ve spent years working out how the market works, and can call exactly where price will bounce, and that knowledge has come not just from understanding the ITs, but also from understanding the miseducation of the retailers.
It becomes easy to read the market, but can only happen once you’ve learned that mainstream education is specifically set up to make you all hand over your stops en masse.
(Admin, please don’t remove this post. It’s kind of important knowledge, regardless of the source)
You are sorely mistaken if you think IT don’t trade solely on supply and demand and they are always on the lookout to stop hunt. They trade supply demand matching orders to be filled. Stop hunts are just a consequence of retail traders placing SL in the wrong place That’s all. I think you would find that rather than them taking you out just beyond demand its more likely there is another level of demand below. Always look left. Possibly level on level demand. I find with entry and exit either side of the zone I’m most often safe. When price breaks through the zone and takes me out that’s just the name of the game. Plus I have to ask when you say SD is another trap,a false understand… If so then what on earth is the market ? If it’s not the filing of buy and sell orders in other words SD, what is it?
It seems you’re speaking from belief rather than understanding.
The market is a farm, just like the rest of society. In it is an herd of people, manipulated through hope and fear, into handing over their life savings.
The people who run it have no interest in making profits from it, as they already create every currency in it, out of thin air.
What they want is for you to lose, plain and simple.
Our emperor runs the market. Has done ever since the Monday after the battle of Waterloo. He is worth four times the value of our planet and everything on and in it. He has no need of money. His game is debt slavery. Your taxes go straight to him.
If you ever manage to make it in this business, you’ll first have to stop believing in the SD fairy. It doesn’t exist.
Supply and demand has to exist by the very fact (ipso facto), that you are talking about money flowing from the majority to the few. Or others wanting the herd to lose.
The heard cant lose until they either buy or sell. Which creates supply or demand.
Inst that so?
I don’t wish to get tied up in semantics here.
Saying the market moves by supply and demand is like saying that cold is formed from ice.
The market turns in rally base drops and drop base rallies. That’s totally natural, giving the retailers the chance to get their orders in so their stops can soon be taken. When compressing, these RBDs and DBRs get respected. But only during compression. The ITs have many other ways to move price, so unless you know you’re in a compression, you’re only gambling.
And that’s the problem in the market. Retailers are all searching for an edge in their gambling. No gambler should be allowed within a million miles of the market, as it will spit them out in a flash.
The ITs don’t trade by SD. They create SD, and much of it is fake.
To keep from frightening everybody away, they make it look like there’s some esoteric order in the market. In doing so, they actually do make order in the market. If it was the simple order of SD, then everybody who bought at demand and sold at demand would compound to quadrillions in a week.
The obvious fact that this does not happen is proof positive that SD does not work.
The only way to profit in this business is to understand what’s really happening with price, and the emotions of the herd. It’s possible to pinpoint massive turns long in advance, which can multiply accounts with every trade, but only once you get out of the herd and watch the way they move
Its like Lewis Caroll’s, through the looking glass.
Everything is reversed.
Completely disagree. You place to much focus on retail. Retail is but a drop in the ocean of the Forex market. Need to differentiate here. The big banks do have the money to manipulate the market to a degree but this is not important to us and they have there own agenda which is certainly not to take our stop loss. On the floor exchange traders matched buy orders against sell orders all day every day. They traded supply and demand. Retail traders are just trying to do the same thing but without the added benefit of seeing the order book etc. It seems you look at the charts and see magic and mystery. Just Google why price moves in Forex. It’s supply and demand.
Google what moves the market? Should I look in wikipedia?
The notion that doing what everybody else is doing is just plain silly.
Show me one chart in which price continuously moves from S to D to S. It would just be one diminishing pennant. There is no such chart.
The idiots on the floor trade supply and demand because they have no other idea how the market works. That’s why people are losing their pensions. They have no idea what they’re doing.
I understand that you’re suffering from cognitive dissonance about all this. Hearing that what you believe so strongly in is wrong, and not being able to find one pennant chart has to be upsetting. But if you don’t face it, you’ll end up losing.
Show me the pennant chart, and I’ll stop using my understanding which is proven to work, and bow down to your wisdom.
But no pennant = no SD rule
