I find that scaling in (averaging down) is necessary for people (like me) who cannot predict price direction. Trust me, if I could predict direction, my strategy and money management would be a lot different.
Scaling in is superior for people who can’t predict price direction (which is me) and who are trading strategies that lend themselves to scaling.
If I could predict price movement, I would go all in with my entire position right away.
Fib gurus will post after the fact charts. In one of them, price retraces to 38% and they say “look! Price retraced to 38% and we bought there!!!” In another one, price retraced to 50% and they will say “look, price retraced to 50% and we bought there!”
My whole point is that ahead of time, they had NO IDEA where it was going to go. On the second chart, they didn’t know that it was going to go past 38% down to 50%. And on the first chart, they had no idea it was going to reverse at 38% and not go down to 50%.
I don’t know if it is going to reverse at 38%, or 50%, or 62%… or 27.5%, or 36.349287%, or 95.11111%, or anywhere else.
I do average down starting at 38% down to 68%.
Fibs are dumb and so are the doublespeaking gurus who teach them. There is no logic behind suggesting that they get applied to the finacial markets.
That being said, this thread demonstrates the only way to trade with fibonacci lines in a straight forward manner. There are no BS excuses, no double speak, no after-the-fact BS explanations of why price reversed at one of the lines one time and another one another time. Before you even enter the trade, everything is exactly mapped out: your entries, your stop loss, and your profit target. Surely as a confused trader you can see why that is infinitely more useful then the slippery double speak BS spewed forth by other “gurus.” Have you ever tried to read a post by some of the gurus explaining their methods? It’s a bunch of doublespeak, confusion, and overly-complicated crap that doesn’t even make sense, and if you quesiton them on it, they get ultra-defensive (which is textbook scam artist behavior).
This site is the opposite of that. There’s no doublespeak. There’s no ambiguity. There’s no BS. There’s no riddles. There’s no after-the-fact excuses.
To be honest, this method would work even if you used other levels instead of the fibonacci levels, the only difference is I wanted to give fib traders some hope so for this thread I chose to use the levels they love so much.
Put another way, it has nothing to do with the Fibonacci levels.
I hear this a lot from Fib traders:
“Well if enough people are using Fibonacci lines then they will become a self-fulfilling prophecy and work!”
First of all, are they working for you? No?
They’re still missing it.
If hundreds of thousands of people use it, that doesn’t mean it isn’t outside the realm of trading. “if everyone does it it must be right.” No.
If millions of people use tennis scores to trade, that doesn’t mean tennis scores are related to trading.
Fibonacci sequences are outside the realm of the financial markets.
Are they a real math thing? Yes.
Might they exist in nature? Sure, maybe.
Does that mean they have anything to do with trading at all? Of course not.
Because you’re taking something that is definitely outside the realm of financial markets and trying to apply it to the financial markets.
It’s exactly as illogical as applying something like the progression of Tennis Scores, which are definitely outside the realm of financial markets, (0 (love), 15, 30, 40) and trying to apply that to the financial markets.
Or taking a progression of prime numbers, which are definitely outside the realm of financial markets, and trying to apply that to the financial markets.
Or taking [anything] that is outside the realm of the financial markets and trying to apply it to the financial markets.
Is the fibonacci sequence a “real thing?” Yes, absolutely. That wiki article explains it.
But is completely outside the realm of trading and that is why it makes as much sense to apply it to trading as it does to apply Tennis scores or prime numbers or anything else.
I’m not sure how else I can explain it.
I mean think about it. You’re saying that a ratio of numbers (that may or may not even be found in nature) are somehow applicable to psychology. That’s a colossal stretch.
Ratio of things in nature != psychology. That’s as absurd as saying the number of pellets in a bag of dog food can predict basketball scores.
There is some information on Wikipedia about the Golden Ratio:
That link just explains fib numbers and has one bullet point about how some people say it indicates resistance points in the market but it’s disputed.
It doesn’t explain how or why or where the correlation from [unrelated mathmatical property] to [financial market application] comes from.
Once again, just because something exists in nature doesn’t mean it has anything to do with trading!
You can’t post pictures where prices happened to reverse at one of the fib lines and then say on look, fibs work! That’s exactly what fib “gurus” do and we’ve already established they don’t know what they’re talking about.
You had no idea ahead of time that price was going to reverse at the 78.6% line (or anywhere else), so showing an example where it actually does isn’t proving anything.
Once again, for everyone reading this site:
Fib “gurus” will post pictures and say “look, price reversed at these lines! Fibs are magic and they work!!!” Yet beforehand there is no way they could’ve possibly known which fib line price would reverse at, if any at all.
What I am talking about on this site does require any of that crap because it doesn’t even matter. I don’t claim to predict which line it will reverse at, nor do I care, because as long as price reverses at one of them (or even somewhere else), I will make money.
I’m not a person to claim to be able to predict price.
All I’m saying is if price reverses at Fib levels, the method I have laid out here will be wildly profitable. It can reverse at any of them.
I just know you guys use fibs so you should find this information beneficial. I really don’t care one way or the other.
You will find, however, that this thread is more complete than any of the other fib information you may have seen.
I’m sarcastic because fib “theory” is ridiculous and the “gurus” who promote it are sham artists who never give specifics.
You will find that this thread is not that way. I’m not vague and I don’t BS.
If you are too busy having your feelings hurt because I made fun of fibs and called them hocus pocus, then I guess you will miss out on the discussion. If you are unable to separate cynical writing from fact, then that’s your loss. But if you have ever thought “WOW, there sure is a LOT of BS in the trading world. What is so special about fibs, anyway?” as opposed to believing in their mystical natural resonance of harmonic frequencies on a seashell because some guru told you so, then you are welcome to stay and participate. I know you are serious about learning to trade so it would be cool to get your input.
And another trade almost immediately after the last one.
And AGAIN right after that one.
This one has you fully loaded as well.
HOLY COW you guys FIBS are MAGIC!!!!
