
Fibonacci numbers
Is there any real value in automatic statistics to draw dealers from the air, grabbed appear? Proponents of the random market theory (the efficient market theory, and many variants would say): "Absolutely not." But the army of Fibonacci followers and a sea of Stock Trader, please use the difference that they have observed to stop prices Fibonacci ratio after time. The question is therefore simple, have to be right and someone must be wrong, why the market in each camp followers argue about something so basic?
Do you think it is ironic that we understand more about the subatomic world of molecules, we also know how to market and its functions? Some of the best and brightest scientists claim there is no predictive ability to deal with Fibonacci Trading. Why? The science of predictive indicators, there is no litmus test of scientific legitimacy. If you've ever traded Fibonacci numbers can you tell me whether the market will turn to the 38% retracement, 50% retracement, 61.8 retracement? The problem researchers have with these systems, there is no empirical evidence. But many traders swear by them and are very successful in the lucrative trade.
Welcome to a world of day trading. It is a world that makes use of business software that is wild and varied results are unpredictable. Since the functions that the market does not yet understand the universe of different opinions on the market price action shows you a variety of theories and dealers who vociferously defends the system, they can trade with the exclusion of other trading systems. Moreover, it is unlikely that two players who trade the same, even if their investment philosophy is to find identical.
Let's start with the Fibonacci numbers. The ratio used for this set of numbers to calculate, is 1.618 and remains constant throughout the sequence. Originally identified by mathematician Leonardo Fibonacci, in the thirteenth century, its popularity has increased exponentially in day trading. The question is whether they work and why they work. Anyone who has Fibonacci numbers traded to realize that the market breaks often, sometimes turns, explosions, and often right through the sequence of Fibonacci retracement. There is no denying the numbers are relevant, and the dealers pay attention to them.
But why stop the market and you start so often on these figures? In trade, we do not necessarily care about the "why" questions when something is or has predictive value, it is used. You can not predict what will inevitably Fibonacci number to honor the market decide. On the other hand, many identify large market potential and valleys with the Fibonacci relationships, but all players were able to identify this number with the alternative method of support and resistance. But this support and resistance often occur directly at 50% or 61.8% Fibonacci levels. Sheesh .....
It is my view that the Fibonacci numbers work fine, but the cause of their work, because so many tech companies are using the system. If the market is a step up from the valley to the summit, most technical traders will immediately add the Fibonacci retracement of the whole movement, and thus the system into a self-fulfilling prophecy. And that's okay. Many real Fibonacci Trader crimes and argued that the statement, and its relevance in the relationship. Perhaps there is, but I do not buy that explanation. As a supporter of chaos theory, I am the only scientifically relevant statement is self-fulfilling prophecy argument. Fibonacci people tap old architecture and various natural phenomena using Fibonacci sequence. It is true that many of the ancient architects and unexplained phenomena have relevance in their respective fields, but I can not connect the dots. That is to say, "Yes, it is about Fibonacci numbers, but what does that have to do with the system?" The answer is a resounding "no".
But I am still with the Fibonacci ratio in my trading ...
As a day trader my job requires me to take the winning trades. Whether the Fibonacci sequence has been scientifically verified is irrelevant to me, because I only designed the winning trades. I can not recommend just Fibonacci ratios in your trading. However, I move always in the lane for a significant retracement market, up or down. You would be surprised how often the market, they also honored. I especially like the trade with Fibonacci if it is already stopped and turned to a certain number, according to the real purpose of this paragraph on the map. Then I can work on trade, has been granted on the basis of information about Fibonacci.
So you have, the cause of the Fibonacci ratios work is unclear, and I am not prepared to give the credibility of the mythical story of the relationship between the Foundation. On the other hand, there is no denying the market attention to these numbers. If I think they are a self-fulfilling prophecy is irrelevant because we only dealer in profitable industries, and increasing account balances. "Why" not only does not matter.