I get messages from people telling me I’m doing it wrong.
Not a single one of these people has called live entries and exits.
Fibs in general:
It’s hocus pocus where people think the market is supposed to retrace at 38%, 50%, and 62% because those are magic numbers that resonate with universal frequency or some mumbo jumbo like that.
Here’s a case where price didn’t reverse at the retracement levels but buying them still would’ve been profitable:
Sometimes it doesn’t work at all.
(how can this be??? fibs are magic!!!!!!!!!!!!!)
Note that you will never get an explanation from a “fib guru” about this type of situation. They will just ignore it.
This picture illustrates why 38.2, 50, and 60whatever are not necessarily the optimal places for adding to your position if you’re creating an optimal system. Unless, however, you believe that fibs are magic in which case they are the only values you need!
Let me try to explain this one more time.
Fib Gurus say – “Price reverses at fib numbers.” Yet they never give any specifics for which of the fib numbers price reverses at, or why. If it works, they claim to be gurus. If it doesn’t work, they make up excuses. If you ask them “how come sometimes it reverses at 38% and sometimes at 50% and other times at some non-fib level?” they will reply with vague bullshit about the ratio of a seashells spiral or something.
I say – “If price is more likely to reverse at a fib level (which fib traders claim is the case) then buy at all 3, and it eliminates having to pick which one it will reverse at.” I don’t know about you, but I suck at picking tops and bottoms. I’d hate to buy at 38.2% and then have price go down to 61% and I get stopped out. I’d also hate to be preparing to buy at 50% but price decided to reverse at 38.2% and I never even entered.
This way, if price reverses at any of the fib levels (which is what fib traders believe will happen), you will make money.
What is so hard to understand about that?
I said conventional fib theory is hocus pocus BS. But this method is designed to take advantage of the fib numbers that price supposedly reverses at.
And sometimes they never retrace to the Fibonacci lines:
OMG WHAT DO THE GURUS SAY ABOUT THIS???
See?
And short, too:
Don’t get the wrong idea, though. There are plenty of times when price doesn’t reverse at Fibonacci levels.