Does Fibonacci levels help you find out the bottoms?

[djsinha]

In my view, Fib levels, on its own cannot indicate reversal levels. But they do work specially in liquid stocks/markets. I will prefer to use them for confirmation of trading signals that are generated by other price patterns / indicators. In my experience, most common fib level is 50% followed by 38 and 62% levels.

Happy Trading,
Anup

I think one shud be out one-third at 38%, another one-third at 50% and the last one-third at 62%. Now if you feel that price is gong to reverse after the 38% retracement level...then better take out the remaining two-thirds also...likewise for 50% and 62% levels.

 

[darsh_goswami]

Darsh,

Phi is a Mathametical Number only,it can be put in any Software / Calculator.

Asish

Thanx ashishda for correcting me.

all i meant to say was ,.. Phi is not available directly in Metastock but if i m not wrong ,.. there was some indicator like phi circle in Gannalyst ,..
Please do correct me if i m wrong .
Regards,..
Darsh.

 

[sudoku1]

I think one shud be out one-third at 38%, another one-third at 50% and the last one-third at 62%. Now if you feel that price is gong to reverse after the 38% retracement level...then better take out the remaining two-thirds also...likewise for 50% and 62% levels.

fibo ratio may work well in liquid stocks & specially indices.....one has 2 b very careful while applying them for illiquid counters where circuits r daily dictated by handful of operators.....

 

[joy.edakad]

Hi, All

In a strong trend price retraces by 0.382% of the swing, but in the process of trend reversal, it retraces to 0.618% or lower. It is my personal observation and more research is needed on it. But many times i had used it successfully to trade. Also use 1.618,2.618 and 4.236 to identify targets for new waves/breakouts.

 

[sattimes]

wanted to ask this question,


though 50% is not a fibo level, why it is frequently used?

any particular reason for this?


satish

 

[sankar ghosh]

If Fibonacci level can give you the bottom ,It should give you the top also.In a bull market it may just go under 0.618 level fish the stop losses and start the up move.In a bear market It is the other way around.
Unfortunately we are never confident about the bull/bear market.Any phase can start tomorrow.
What to do? Fabricate your own profit and loss bearing exit point and stick to it.
I never understand the waves,volume very high or low for a particular day or week - nice to know,open interest up and down-may be good for a day to know.
If anybody can confidently tell me that tomorrow / next week price will be up by
x percent, I am waiting.

 

[darsh_goswami]

If Fibonacci level can give you the bottom ,It should give you the top also.In a bull market it may just go under 0.618 level fish the stop losses and start the up move.In a bear market It is the other way around.
Unfortunately we are never confident about the bull/bear market.Any phase can start tomorrow.
What to do? Fabricate your own profit and loss bearing exit point and stick to it.
I never understand the waves,volume very high or low for a particular day or week - nice to know,open interest up and down-may be good for a day to know.
If anybody can confidently tell me that tomorrow / next week price will be up by
x percent, I am waiting.

Dear Shankar ,..

Well ,.. Fibonacci is not something what u will eat and digest quickly.

To understand fibonacci well u need to spare time with it. Then later on u will be able to understand the benefits and limitations of fibonacci.

Till the date i didnt find any system which can give u tomorrows high and low. This is not something i m saying without any experiences but after spending so many years with technical analysis and its methods i m saying so.

But then too if u try to learn fibonacci u can definately find the tops and bottoms easily then other methods ( there could be other methods too.). If u go to see my earlier thread INTRADAY TRADING MADE EASY( closed long back coz of lack of appriciation ) ,... was all about the system developped using fibonacci levels and tricks. which was very much helpful to traders where to buy and where to sell. It was something like assumming tops and bottoms for next day ( then too it was also not 100% sure.).

So personal advise is spend some time with fibo and understand it. try to imply it on ur trading and i m sure u will benefit from it.

Regards,..
Darsh

 

[sankar ghosh]

Thanks let's talk about nifty at this juncture.Recent high and low are 6357 and 4002.Currently it is consolidating at at levels 4971 and 4540.Last friday closing was 4777.The fibonacci level suggests that 0.618 retracement is 4901 and about .77 is 4543.
Against above observation without using any other technical indicator as filter I can at the most say predict that if nifty goes below 4540 run for cover.
I can't predict that it will not go below 4540.
Open for your comment.

 

[darsh_goswami]

Dear Shankar ,..

Fibonacci will work with the combination of other indicators & patterns. That is the best way to dig out money from market.

Fibonacci levels are commonly used for possible reversals or possible target zones. So when it hits that level we can comment over it more. It would be too early to say wether it will hit 4540 mark again or not. Lets just see the market.. current maker for short term is not at all in any direction to trade, currently its just struggling between bulls and bears. but for medium to long term ,.. structure is quite negative . We could see more downsides. if it closes below 4450.. it will confirm lower top lower bottom formation and it indicates pure bear market ahead. so better to be cautious.
I personally would like to stay away from such trendless market. Will wait for a clear trend and then will enter the position ( long/short ).
Regards,..
Darsh

 

[darsh_goswami]

please do check the link below ...
the fibonacci tutorial video ...

http://revver.com/video/485782/lesson-1-fibonacci-number-sequence/

Hope u will get something from there ..
Regards,..
Darsh