Question for you Fib Retracement experts

Discussion in 'Technical Analysis' started by Ansare, Mar 3, 2014.

  1. Ansare


    Maybe I'm reading the wrong stuff or it's too complex for my brain, but I can't find a definitive answer for this question:

    When putting fibs on a chart, how far back do you go and why? If I'm using 30 min charts do I go back 5 days? 10? 15? If someone could once and for all explain a method/rule/rule of thumb I would be truly grateful.

    Thanks very much.
  2. The fib retracement is usually applied after an impulse wave ends, to gauge the possible depth of a corrective wave against it.

    Impulse waves have little overlap, come in five parts (three impulses with a corrective wave in between, two places) and usually on increasing volume, and are great for trend following. Corrective waves are very noisy and great for range trading.

    Another, less common use is the fib extension, which is placed the same way (from the base to the top of the first impulse wave), and is intended to gauge the possible extent of a larger move.
  3. Ansare


    Thanks for responding. That makes perfect sense, however I wonder if all or even MOST people who regularly use them would know an impulse wave if it hit them in the face. Your explanation may very well be THE explanation, but I would still love to hear from others who might have a different take.

    Regardless, thanks, again for the help.
  4. ammo


    for the non fib stuff i use, like to start at the start of the move to be current,and then you can work your way back,to a larger move, to get a larger pic
  5. tiddlywinks


    Another way to use Fib, in addition to retracement and projection is
    the intersect of fibonacci time with fibonacci price.

    Die hard fibo enthusiats I know claim the fib price/time intersect to be a type of rare fibo grail.

    I actually use such on long-term charts. Coincidentally, I attempted to start a blog a couple weeks back with my inaugural post about the ES fibo price/time intersect. The blog is a work in progress at best.

    I also sometimes use fib projection... mostly off of individual bars. I am a flat-eod futures trader.
  6. NoBias



    I think this is the first Ammo chart without nipples and cleavage... lol
  7. speres


    Its a long road to get your head around fibs and ratios but it is worth it. With price action its very powerful stuff.

    In line with whats already been stated your first port of call is the main swing , which is the previous high and low swing of where Current price action is at.

    Regarding how far you go back, you do need to zoom out of your chart and get a bigger picture so on a 30m chart you'll be showing 2 or 3 weeks of prices and swings.
    Quite often there is relationships between swings which can give you clues to future turning points

    For ex the white B - C swing is the main swing of current price action but if you keep zooming out theres other bigger swings that will dominate the current swing and price action thats why you need the bigger picture
  8. speres


  9. dom993


    Every one has either a similar question, or found a unique answer that works for them.

    Regardless of where you anchor the start & end-point of the reference swing, your next question is - which level do I look at? Classic levels are the obvious 38.2%, 50%, 61.8%. Then come some less obvious ones, 24.6% & its opposite 76.4% which are true fib ratios, but often replaced by 78.6% (sqrt(61.8%)) & its opposite, 21.4%. Another popular one is 70.7% (sqrt(50%)). The "rationale" behind using those sqrt() values comes from 38.2% being sqrt(61.8%).

    One level you'll hardly ever hear of, is 30.9% ... which is 61.8% of 50%. Take a CL chart, this ratio is "everywhere" (well, when CL pulls-back). It's opposite 69.1% is also interesting (and close to 70.7%).

    Another level which plays a "last resort" role, is 88.7% (sqrt(78.6%).

    So, what do you with all these levels? This is where you start using as many intermediate points as you can in the last major swing, to draw not one but several fib scales (all ending at the same point, but starting from different key S/R levels in that major swing), and look for confluence of levels between those fib scales.

    Those levels are the ones which "should" gather the most interest from the different market participants.

    To be honest, there will always be a fib level of some sort which will show a decent bounce (if not the deepest point of the pullback). Correctly anticipating which level it is, is usually the million dollar question.
  10. ======================
    You look @ ALL the data.

    50% off sale is an important number[any market/marketing];
    I remember SPY retraced about to $75/+, =50% of $150/+.

    AS far as trying to micro manage , market makers can do it.When ever you do not look at all the data; you will make more mistakes than you should.Not that it is easy even if you do,LOL:D

    Not a prediction nor is anything I have read on this thread a prediction.....;
    wisdom is profitable to direct.
    #10     Mar 6, 2014