Hey i`ve seen 2 fib levels for the ~70 zone ,the 78.61% and the 76.39% which sometimes rounded up to 76.4%.It is very confusing and i would like to know if anyone uses any of them, if yes then which one, or if you have any experience with them which one is more accurate?
Here is how they are calculated if this helps,as you can see they are calculated differently:
Had a similar discussion in 2007 and we came to a conclusion that its best to have both lines on your charts. However none of these are “real” fib ratios, but used by traders to determine the probability of a pair to continue moving in the same direction after retracing to 50%.
Get it?
No.They are fib ratios, but i guess anything over the 61.8 is more like going to be an reversal/extension rather than a retracement.But there are still some valid S/R levels at these 2 “fake” fib levels also so it could be considered an extended retracement but since its calculated with fibos its valid.
The problem of your solution is that i cant have both of them.I must pick one,because im developing a fibonacci/eliott wave EA.I must pick one, and the question is which one? So im asking again which one is more precise/accurate/valid?
I believe 78 retracement area is right around the OTE.
What is OTE?
[QUOTE=“Proximus;531158”]
What is OTE?[/QUOTE]
A term the cult leader of babypips made up before he quit babypips after blowing up a publicly traded account.
OTE = Optimal Trade Entry if you are lucky enough to have missed drinking that kool aid.
I like how you assume other traders, fairly new to the site, are going to know WTF OTE is LOL.
Sure, it’s standard. We are all looking for OTEs aren’t we? I mean that’s how to trade with smart money right?? LOL.
I prefer the Jesus swing. Price drops hard but recovers to make new highs on the third day.
…but you have to hold it over the weekend.
The answer is both. The problem most people have with fib levels is they expect them to be hard levels, they’re not. If you use both to create a zone, then a reversal signal within that zone is valid. If you can only use one, then choose whichever you prefer. Price will reach 76.4 more often and possibly give you more false signals as a result. 76.8 will be hit comparatively less often causing you to lose out on the trades that turned earlier. They probably even out in the end.
It’s a compromise, choose whichever’s downside suits you best.
Hey i`m not new to this site , i’ve been around for a while.Anyway there have been studies about candles behaving in reversal/retracement conditions, and many traders agree that a retracement is composed of less candles than a reversal, but only opposite to the current trend.Like for an example ,in an uptrend it takes many small candles to build up a swing high, but a retracement consists (in my research experience) on average about 3 big candles ,rarely 4 on the 5M TF.Be it either continue,which at this point is a reversal , but the impulse that the reversal wave generates is made of less candles than the candles needed to form a swing high from a local minimum.That sometimes is because of a news report, since that causes huge volatility, but sometimes its just generic to the market.
Also you can argue that the ~70 fib levels are more like a sign for a reversal than retracement, but my curiosity is more to trade that.I don’t really care how the PA will behave after i close the trade.And it’s a fact that price will hit the ~70 fib levels more often than do a full reversal, then it’s good for trading.So my question is still which one is more accurate the 76.4 or the 78.61?
Not only fib levels, but support/resistance & pivots plus stochs always turn at either
below 20/ above 80. :lmao:
There is no black & white in trading., just shades of grey.
Have enough to worry about 38.2, 50 & 61.8.
Ok i understand that those levels are nice/established/working but i want to maximize the profit potential so i must include the 70 levels too because they are popular, i would not include the 1.00 level because that is a reversal then, but the 70 is still a retracement, a big one but yes.
S/R just as fib levels are not hard levels but are more like zones.I know that, so by that logic you say to trade the 76.4 because its closer to the turning point and therefore has a slightly higher probability? :5:
Agree completely.
And throw in the fact that 50 is not an actual Fibonacci ratio your shades of grey have now become more of a muddied charcoal color :30:
Yes it is, it’s the division of 1 by 2, and to my knowledge both are fib numbers.It’s calculated
for example:
[ul]
[li]in an uptrend
[/li]SWING LOW+(SWING HIGH-SWING LOW)*1/2
[li]in a downtrend
[/li]SWING HIGH-(SWING HIGH-SWING LOW)*1/2
[/ul]
You should educate yourself on fibonacci:
No, YOU should educate yourself about all things Fibonacci. The 50 level was taken from both Dow theory and WD Gann. It has nothing to do with Fibonacci numbers, sequences or ratios unless something drastic has changed in the world of mathematics since the 12th century.
1 and 2 are both fib numbers man.And as i said in the previous post the formula is dividing 1 by 2 and multiplying it with the SWINGHIGH-SWINGLOW.I don’t know why you say that it is not part of the fibonacci sequence.I don’t know either what this has to do with Dow theory, that theory is about trendlines and stock market movements.You should seriously read some books about them and educate urself, rather throwing here all sorts of fancy words before knowing what they mean.I personally didn’t heard of WD Gann but i`m sure it has also nothing to do with it.
Yeah I pretty much stick to 38.2, 50, and 61.8 myself and pick the optimal entry based on which one lines up with a psychological level or an established support/resistance.
I prefer mixing fibs with kill zones whilst looking for a backwards banana candle formation on the 1H 22min TF. Combine that with some Zulutrade crap and you’re golden.
I find by using fibs i know where not to trade…hence at the fib levels.
You are entitled to your own opinion but you are not entitled to your own facts.
The fact is that 50 (or .50, if you prefer) has nothing to do with Fibonacci.
The fact that you insist that the number 50 has anything to do with Fibonacci, don’t know what 50 has to do with Dow Theory and have never heard of W.D. Gann speaks volumes about who needs to seriously read some books and educate themselves.
I wasn’t aware that any of the words I threw were “fancy” but I can assure you I knew what each and every one of them meant.
For new traders, please take note: this is precisely why you need to understand how the indicators and tools you choose to use on your charts are calculated or created before actually trying to use them in trading. Otherwise, you don’t know what you are actually looking at, what they indicate or how to use them properly. You may also be prone to stating absurdities on internet forums as fact and not even know it.
What is Fibonacci retracement, and where do the ratios that are used come from?
Oddly enough, no mention of an OTE…
Thanks John, this statement is a keeper:33: It’s going right up on my computer screen, right next to “don’t hold on to losers”
Proximus my friend, do you think it’s gonna make that much difference what one you choose? If you’ve decided to use it, as long as you’re consistent, I can’t see how it will make that much difference. Personally I use 78.6, but in my opinion once you’ve decided you want to include the 70 in your fibs, just be consistent. I think fibonacci is like hand gernades. . . close counts 