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Several RTers have asked me to repost my little dissertation on
Fibonacci, which I last posted on Nov. 10, 1998. So here it is, by
popular demand.
Enjoy,
Norman
Message-ID: <36480C73.79279803@xxxxxxxxxxxxxxx>
Date: Tue, 10 Nov 1998 01:50:45 -0800
From: nwinski <nwinski@xxxxxxxxxxxxxxx>
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To: Linda Swope <linda@xxxxxxxxxxxxxx>
CC: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Re: learning fib
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<P>Linda Swope wrote:
<BLOCKQUOTE TYPE=CITE> <FONT COLOR="#000000">Hello all,</FONT> I
would appreciate any feedback on my learning <FONT COLOR="#000000">Fibonacci
</FONT>ratios and basing a discretionary trading system on it. Every
TA book I own has a paragraph or a page, but no in depth discussion.
Can anyone recommend a book on fib?
<P>NW: <U>Square root of 5 +1 </U>
= 1.6180339
<BR>
2
<P>1.6180339 is the only number that is the reciprocal of its self.
<P>Use Fibonacci harmonics to project support and resistance levels:
<P>Measure an important price or time range for a market. Then take
one or more of the Fibonacci harmonics times that range and add to high
or low. Some Fibonacci harmonics are:
<P>.1459, .236, .3819, .50, .618, 1.00, 1.236, 1.3819, 1.618,
2.00, 2.618, 4.236, 6.854, etc.
<P>The Fibonacci number series is derived by starting with adding 1 + 1
= 2, then adding the preceding
<BR>answer to the next total, i.e. 1+2 = 3, 2 + 3 = 5,
3 + 5 = 8, etc. Please note that the further along
<BR>in this number series you progress, the closer the ratio between the
two previous answers approach
<BR>1.6180339, i.e. 610 / 987 = .6180344. Another interesting
fact is that the variance from .6180339
<BR>alternates above or below with each number at a diminishing difference..
<P>The most direct harmonic series of Fibonacci are the Lucas numbers.
They are derived directly from
<BR>the "golden mean" .6180339 or 1.6180339. To start, just multiply
1.6180339 by itself and then continue to multiply each answer by 1.6180339
so that you will arrive at a series which begins
<BR>1.6180339, 2.6180337, 4.236, 6.8541, 11.09, 17.94, 29.034, 46.9787,
etc.
<P> A recent analysis of the DJIA is the July to October correction.
The high print on July 20 was 9368. Subtract the various major low prints,
i.e. Dec. 6, 1974 = 574, March 28, 1980 = 735,
<BR>August 9, 1982 = 757 etc. and then find the relevant harmonics based
on these ranges.
<BR>For example, if one subtracts the Aug. 9, 1982 low from the July 20,
1998 high, one get a range
<BR>of 8611. .236 times that range, subtracted from the high of 9368
= 7336. That is fairly close to the actual low on October 8, 1998.
This supports the theory that the DJIA only had a minor correction in an
ongoing bull market, as .236 is a minor harmonic in the Fibonacci series.
Also, the market usually will progress thru the various harmonic steps.
It seldom jumps from a minor harmonic to a major harmonic without progressing
thru its logical progression, a .236 correction should be followed by a
.382 correction, etc. So this says that if my analysis of the recent correction
is right, that was a minor
<BR>correction, but future corrections are going to be even more pronounced
and volatile. We can also
<BR>project that 1.6180339 x .236 = .3819 times the next range (which if
the current range based on the 9368 range = 6079 should be the next major
support level to expect if the October 1998 lows are exceeded) should
equal the next low. Another thing to watch for is if there is a marginal
new high,
<BR>this should balance against a marginal low in reverse chronological
order such as the March 28, 1980 low at 735 vs. the Aug. 9, 1998 low at
757. A new marginal high should be balanced against the 735 low to generate
a new range and hence new harmonic levels.
<P>NW: Well I just gave you the whole Fib. course in a nutshell.
The rest is a mater of practice, practice, and more practice. I guess
I just saved you a few thousand dollars for some of those overpriced computer
programs and books? Get yourself a good $5 calculator and experiment.
<BR>Oh, by the way, you can also do the above projections for time as well
as price. Instead of measuring
<BR>the price range, just measure the time a particular swing took and
then run the harmonics. After you have mastered the Fibonacci harmonics,
all you need is a good understanding of the basic principles of Astrology.
<P>Have Fun,
<P>Norman
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<BR> Is anyone out there using it primarily for position trading?
For day trading? All comments and input appreciated!!Linda<FONT COLOR="#000000">Linda
Swope</FONT>
<BR><FONT COLOR="#000000">Swope's Mountain Photography</FONT><FONT COLOR="#000000">**Climb
the mountains & get their good tidings; Peace will flow into you as
sunshine into flower; the winds will blow their freshness into
you & storms their energy, & cares will drop off like autumn leaves.
John Muir**</FONT></BLOCKQUOTE>
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</x-html>From ???@??? Thu Dec 10 07:58:24 1998
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Subject: Re: DISCOUNT BROKERS
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In a message dated 12/9/98 10:42:02 PM Eastern Standard Time,
Bogeybunky@xxxxxxx writes:
<< I never see any comments on this forum from traders who are using some of
the
more heavily advertised discount commodity brokers such as: Jack Carl, Lind
Waldock, Ira Epstein, First American, et al.
I would be interested in hearing any experiences (good or bad) with any of
these type brokers. >>
good morning
have been using first american for over 10 years
not that good for day trading just good for position trading
Ben
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