Fibionacci Retarcements

hi abudawud
looking at your last 2 example i would say its wrong.
Fib retracements needs a comfirmed low and not after a gap up. It needs a low and a high.
For me thats wrong but others may argue

The answer to this question is actually quite complicated as Fib retracements need to be attached to specific waves in order to work most effectively. You can't just randomly select a high and a low to draw your Fibs on.

For example, on your BLVN chart, the move from the low to the (current) high looks like 3 waves. This could be waves 1,2 and 3 in which case a Fib retracement from the top of 3 to the low of 1 wouldn't make sense.

I wrote a piece about the use of Fibs in the Oct 2012 blog. I think this is a link to it: chartsview.co.uk/EasyBlog/testing-blog.html

If not, then just search the blog archive for Monday 29th Oct 2012 and it should be there.

Good luck!

Hi Guys,

I just watched Remos video on Fib retracements and understand what he is doing but also have seen other people use fibs in different ways and am want to know if that is valid too. So to give an example Lets take the move up on blvn over the past few days. I have included my chart with the Fibs as i used to do them prior to watching the video. I drew a fib line from the start of the move to the top of the move to see where it could possibly retrace to if I wanted to get in. As you can see from the chart it was supported around the 61.8 fib line. So on the 22/5 I would have bought as it was at support.





Another example i will use is blinkx. As you can see I plotted the fibs from the move up on the 24th. I exited on the 8th and was looking for a retrace to enter. so on the 9th it dropped to the 38.2 fib line and that is where i was going to enter but bottled it. The arrow indicates the fib hit.





So is this also a valid way of using fibs or have i been doing it all wrong???

EDIT:

just to add to the above now I have drawn a new fib for the latest rise and would be looking to enter on the retarce probably to the 38.2 fib which just so happens to correspond to the 118 resistence level too. Again this is how i have been using fibs and would just like to know from the more experinced if it is actually valid?