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Chas,
I would be open to discussing details with you if
you email me privately. The volume of information required for a detailed
discussion could easily bog down the group.
Background:
I was a computer consultant for 30+ years
with extensive technical programming experience. I have been using
Fibonacci analysis to analyze the Futures markets quite successfully for
several years and have programmed many of the analysis techniques for inclusion
in my trading system. I been developing my own personal trading system
over the past 12 years. Before anyone asks, I am a trader not a system
vendor therefore my trading system is not for sale at any price. I am an
avid student of Fibonacci and as such I have purchased and studied "Fibonacci
For The Active Trader" by Derrik Hobbs at length and have added some of the
concepts presented to my trading system (most of his presentation was already
known and preprogrammed). It is an excellent book for anyone interested in
Fibonacci analysis and well worth the purchase price.
Response to your observation and
questions:
Utilizing Fibonacci as a practical trading tool is
not as overwhelming a research task as one might think. Once the concepts
and techniques are understood, programming them into an analysis package is not
that difficult. When the programming has been completed and thoroughly
tested the resulting application to the markets is straight forward provided you
have an accurate and reliable (O,H,L,C,VOL,OI) data source.
* Has anyone done a comparative
analysis of the tools included in all the books and software
programs?
I have not done an
exhaustive comparative analysis of all the tools,
books and software programs available for several reasons:
1. The time required to complete such a study is impractical
2. The cost of obtaining all the elements required would be
prohibitive
3. The results obtained from such a study would yield marginally useful
information
4. What someone else has created is of no interest to me
5. I have studied Fibonacci thoroughly and have used that knowledge to
create my own interpretation which works well for me
* Has anyone conducted rigorous
backtesting of the various techniques?
In the course of developing a trading system one must perform exhaustive
backtesting or the resulting system will not be applicable to current market
data:
1. I have a wide variety of backtesting techniques that I use in the
development and evolution of my trading system
2. I backtest everything in my trading system (including my Fibonacci
analysis techniques) utilizing a minimum of 20 years of historical market
data
3. My trading system has evolved over time and will continue to do so as
long as I trade the markets therefore new elements are being added
continuously
4. If elements of my trading system do not survive the rigors of
backtesting they do not get included in the final system I use for trading
* What are the results of this
research showing which techniques or calculations are statistically significant
for indicating where prices are
likely to find support or resistance; for the purpose of entering or exiting a
trade?
The answer to this question would consume volumes. I have databases
packed with the results of my research and many statistical analysis techniques
used to compare and validate the results of that research. The bottom line
is that the research (volumes of it) must be validated over time (20 year
minimum) with consistent results based upon mathematics (statistics, geometry,
etc.). Nothing is included in my trading system without a solid
consistently reproducible foundation in applied mathematics.
Part of the answer might be in discovering which
combination of calculation tools <FONT face=Arial
size=2>point to
the same answer regards price and time. In other words; if you have
several tools; as a composite; pointing to the same
Fibonacci level (in price or perhaps price and time) then the statistical
probabilities might indicate a high level of
confidence where a trade could be
taken.
You have discovered one of the basics for successful application of
Fibonacci analysis to trading. One of the most important concepts utilized
by Gann was the squaring of price and time. Fibonacci analysis is an
excellent determination of when price and time come together. I will not
initiate or terminate a trade based on price alone or time alone.
Fibonacci (or any other analysis for that matter) must be applied to both price
and time to produce consistently reproducible results. When price and time
come together one has a very high probability of a successful trade.
You also touch on another extremely important concept of market
analysis. One must never initiate or terminate a trade based upon the
strength of any single analysis technique. Fibonacci must never be used
alone, other analysis techniques must always be employed to increase the
statistical probabilities of a successful trade. Should you be interested
I would recommend devoting some time to studying market Geometry. One of
the best sources of information on market Geometry is Scott
Warner at <A
href="">futuresgeometry@xxxxxxxxxxxxx.
Fibonacci analysis combined with a thorough application of market geometry
techniques will yield amazing results, try it for yourself and see.
Tom
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
Charles Meyer
To: <A title=realtraders@xxxxxxxxxxxxxxx
href="">REAL TRADERS
Sent: Saturday, July 17, 2004 6:51
AM
Subject: [RT] CROSSPOST:
[fibonaccitrader] Fib trading books
Group-
Here's my 2 cents on this complex subject.
First I have heard many positive comments about the book by Joe
DiNapoli;
"Trading with DiNapoli Levels". Second, I
have since heard that there is a slightly better book by Derrik Hobbs
titled
"Fibonacci For The Active Trader". Go
to google; do a search and you'll find a most interesting link about Mr. Hobbs
along
with some details about the book's
contents. This brings me/us to a greater and even more complicated
question.
When I think about using Fibonacci numbers,
ratios, calculations, etc as a practical trading tool, it appears to be
an
overwhelming research task. For example;
apart from several books on the subject; a discussion of this topic would
not
be complete without referencing <FONT
face=Arial size=2>the works of Robert Miner and his Dynamic Trader software;
and Tom Joseph and his
Advanced Get software.
Probably the most important questions to be
answered out there would be:
* Has anyone done a comparative analysis of
the tools included in all the books and software programs?
* Has anyone conducted rigourous
backtesting of the various techniques?
* What are the results of this research
showing which techniques or calculations are statistically significant for
indicating
where prices are likely to find support or
resistance; for the purpose of entering or exiting a trade?
Of course it's easy to ask these
questions: getting practical answers
and trying to sort through what appears to be a complicated maze of questions:
is not. Part of the answer might be in discovering which
combination of calculation tools
point to the
same answer regards price and time. In other words; if you have several
tools; as a composite; pointing to the same
Fibonacci level (in price or perhaps price and time) then the statistical
probabilities might indicate a high level of
confidence where a trade could be taken.
Thoughts, comments, or experiences are
welcome. Thank you for your time and attention.
Chas
====
<BLOCKQUOTE
>
I bought the Volume One is very good. Better than Larry
<BLOCKQUOTE class=replbq
>
<FONT face=Arial color=#0000ff
size=2>I like Larry Pesavenuto's Pattern Trading with Fibs. However do go
to www.harmonictrader.com
first. You may find all you need in there..and free.
<FONT face=Arial color=#0000ff
size=2>
<FONT face=Arial color=#0000ff
size=2>Good Luck,
<FONT face=Arial color=#0000ff
size=2> <FONT face=Arial color=#0000ff
size=2>
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