Larrybf, I would first choose: Joe DiNapoli's ..."Trading with DiNapoli Levels" OR / AND Larry Pesavento's .......Fibonacci Ratios with Pattern Recognition. ....( which is a little harder to understand... and funkier....but well worth reading as it has a totally different approach to Fib Trading than does Joe DiNapoli. After that read Pesavento's "Private Thoughts from a Traders Diary" Just my Opinion. Life is what happens to us while we are making other plans. John Lenon
How about fibonacci timing? Sometimes market moves fit neatly into Fibonacci schemes. S&P July 24 low to Aug 22 hi = 21 trading days July 24 low to Oct 10 low = 55 trading days. Aug 22 hi to Oct low = 34 trading days. 21, 34, and 55 are natural Fib numbers. Oct low to Dec 31 = 55 trading days. Oct low to Monday Jan 27 = 1.38 x 55 A move down on the S&P of 19 points will place it at the .618 retracement level of Oct low to Dec high. So a key time and price cycle may converge tomorrow. Non fib cycle: Oct low to Dec 2 = 37 trading days. Dec 2 to tomorrow = 37 trading days.
Lay a fib' on the monthly PG chart using the obvious high at the end of 1999 - somewhat "fib"-ish where prices have consolidated over the last year.
Like today, for instance, if you had the ES03M 60m chart on your screen. 864.8 is the 61.8 fib off the higher low on 31 Mar and today the 61.8 fib in time off same low. Combining a Gann concept, today was a square of price and time, where the harmonic is 61.8. Today's low was 864.25. An up open is probable in this scenario.
Golden ratio doesn't explain everything. It is just a convergence law kind of cousin of The Central Limit Theorem in Probability. When you use this theorem you don't explain anything about the phenoma that is underlying it !!! So it is the same thing for Golden ratio. And if I was an academecian I could write a scientific paper to prove it since my model doesn't use Golden ratio as input parameters and I obtain results that are more precise generally than traditional TA (see for example the screen below I posted about using a bug tracking system software http://www.elitetrader.com/vb/showthread.php?threadid=16138). And yes at OUTPUT I have golden ratio because it is the convergence of this process. Some researchers in neuronal fields suggest me to do so but I know that it would be fruitless - I prefer to exploit it than to become famous arf arf.
ZBear, I totally agree with you on Pasevento's books on Fibonnaci pattern recognition, I have several of his patterns blown up and right next to my trading station and it has helped me immensely. I also have talked to him several times and he is truly a great, and kind human being. (disclaimer: I do not work or am I associated with Larry Pasevento's business's) Enjoyed your post Zbear. J-