“Fibonacci gurus” will show you nice charts after the fact where price happened to bounce off a Fibonacci level and say “see? Fibonacci numbers work for trading.”
Nonsense.
They fail to acknowledge all the times they don’t work.
If Fibonacci numbers are magical, then all you have to do is buy every time price retraces to one, and buy more when it retraces to the next, and eventually when it goes back up you’ll make money.
Do not trade with money you can’t afford to lose. Just because I am profitable doesn’t mean you will be.
Fibs are magical because they’re based on some random calculation that has nothing to do with trading, that someone applied to trading by thinking that ZOMG TEH NATURE OF TEH UNIVERSE IS CONTAINED WITHIN!!!!
Fibs are the same as this:
Increase by 3. 3, 6, 9, 12, etc. Now divide each number by its subsequent number. You now have .5, .66, .75. Now, let’s apply these numbers that I randomly got to trading because THEY ARE MAGICAL!!!!
Draw lines at 50%, 66%, and 75%. TRADING MAGIC POWERZZZZZ!!!!!
Look, if they work consistently, then do whatever. I don’t care.
All I’m saying is I just gave a better method for fibs than any that anyone has been able to quantify in the entire history of trading.
EVERY fib explanation I’ve heard basically boils down to:
– sometimes price reverses at the lines, although there’s no way to predict which line, if any it will reverse at, or how high it will go once it does reverse.
It was then accompanied by some awesome after the fact charts where it worked perfectly.
Sounds pretty vague to me.
Sometimes price will also reverse at my magic .5, .66, .75 numbers. HOLY COW THEY ARE MAGIC!!!! But sometimes they also won’t reverse at my numbers because HOLY COW PRICE IS RANDOM.
If price consistently reverses at fib lines more frequently than at any other place as all the fib gurus seem to claim, then the method in this thread will make you a profitable trader (especially if you play both sides at the same time).