|
PureBytes Links
Trading Reference Links
|
Michael Guess wrote in reply to Lynn's post:
However, once you realize that a W2 is NOT supposed to be a fib
>>ratio, it allows you to view the entire pattern more objectively. It
is just as important to know when NOT to expect a fib ratio as it is to
know when TO
>>expect it.
>Michael Guess
>
Lynn/Michael,
One of the basic reasons why Wave 2 is seldom a Fib retracement has a
lot to do with the state of the market in that wave. Wave 1 is always a
wave of disbelief and reckoned as a fresh selling opportunity by most of
the traders in the market. The overhang of bearishness which is
prevalent in the markets ensures that the Wave 2 would end up deeply
correcting the previous wave 1. This, many a times, exceeds the normal
Fib retracements.
Though most of it has been said before, I would like to add here
something which might go to prove something which has been hotly
debated/denied etc re:Fib.
I have been trading the Indian markets for the past 18 years and have
been using TA for around 12 of those 18 years. Time was when one could
have counted technical analysts in India on the fingers of one hand. Now
with electronic trading the norm, TA has recd a massive boost. I now
find that the Fib retracements,especially 0.618, working like a charm in
all kinds of stocks. To my mind this is conclusive evidence that if
enough people start using something, it is bound to work (for a while at
least, until the cycle of greed and anticipation breaks the cycle) Mind,
I have nothing against the concept of the Fib nos and am an active
Fib-user myself. But a proved point is a proved point.
Dr.Narayan
______________________________________________________
Get Your Private, Free Email at http://www.hotmail.com
|