StockFetcher Forums · General Discussion · PREDICTING TURNING POINTS WITH FIBONACCI<< >>Post Follow-up
6,364 posts
msg #48930
Ignore TheRumpledOne
1/4/2007 8:55:45 PM

A must read!

By John Novak developer T-3 Fibs ProTrader software – Nexgen Software Services Inc.

We now have 8 fibonacci projections and retracements that fall within a tight clearly defined area. If you where long you would look to exit your position in this window. If you are a counter trend trader or swing trader you would look to initiate a short position in this window.

That is how you use fibonacci ratios to predict potential turning points in the market. This becomes even more powerful if you have a confluence of ratios using a 1, 3, 15, 30 minute chart that all fall into the same window.

Buy the Bottom and Sell the Top- Fact or Fiction?

An important part of any trading plan and analysis is to be prepared IN ADVANCE and recognize important potential trend changes BEFORE and as they occur. The lowest risk and lowest capital exposure trade and investment set-ups are often at the significant change in trend. (Tops or Bottoms). The key is to be able to have confidence and the foresight of this upcoming potential turning point so you can position your trade accordingly. This philosophy of calling market bottoms and tops in advance is diametrically opposed to conventional wisdom (remember the majority of traders lose money apparently from trading conventional wisdom and lagging indicator techniques). Most trading and investing books teach never to try to buy the low or sell the high. “The trend is your friend”. This is true until it ends, then you will usually end up give up most of your gains. This is especially true if you analysis is based on lagging indicators. We contend that buying the bottom and selling the top IS an important factor of a viable, well balanced, trading plan whether you are exiting a existing position or establishing a new position-- BUT you must know where to initiate this plan. Fibonacci analysis will give you this predictive edge.

Predictive versus Lagging Indicators

Everyone knows and most still uses lagging indicators. We know them by name, moving averages, stochastics, RSI’s, MACD, and any other type of oscillator you can think of and every twist and variation of these have been tried and most traders still fail with them. WHY? These indicators are nothing more than a visual representation of what has just happened or some measurement of that history. Fibonacci projections and retracements will assist you in determining the potential turning points well in advance of the actual price trading there. It is one of the only PREDICTIVE indicators available on the market today. If you must trade lagging indicators then if you add to the predictions of fibonacci confluences you will find that they will work synergistically together and work to increase your odds in winning.

The Objective of Technical Analysis

Keep in mind that the purpose of technical analysis is NOT to be able to accurately identify every market twist and turn 100% of the time. While this may be the daydream of some analysts and most amateur traders, it is impossibility. Every method of technical analysis has limitations and, at times, will provide contradictory information. Unless the analyst, trader or investor is willing to accept that some times his or her analysis will not provide a confident opinion of the market position, which will result in not establishing a position, he or she is doomed to failure. There are methodologies that do give you an infinitely higher probability of being correct, and fibonacci analysis is one of those methodologies when applied correctly to the market that will give you a decisive edge in your trading.

Knowledge Creates Discipline

As a trader there are only three positions you may take at any one time: long, short, or out of the market. The out-of-the-market position is taken when the technical analysis does not recognize that the market does not have a high probability set up. A good disciplined trader will wait until his or her analysis recognizes the conditions that have a very high probability of success. If you want to be successful, so will you. Once you recognize that the purpose of technical analysis is to identify high probability trade set-ups, patience and discipline should follow. Fibonacci analysis when used properly will help you to define high probability, low risk set ups that will help you to reach your trading goals.

27 posts
msg #48959
Ignore hrosas
1/5/2007 1:31:09 PM

CAUTION!!!!! my computer got trashed. One of the programs I downloaded was this T-3 Fibs ProTrader software – Nexgen Software Services Inc. Maybe this one did not damage my computer. But when you download the sample software they send you to your trade station platform which I have (where I trade) When you sign in they said it needs tons of data between such a date to such a date and then THEY PUT YOU ON A QUEUE to download at their convenience, etc. etc.
Again, they are trying to sell a $ 14.500.00 program that "does wonders" it will predict prices, reversals, support etc.etc.
Now in the sunset of my life I learned that this people make money not on trading but selling systems. If their programs mint money, why bother selling it.
That goes for all the Fontanellis, Oliver Velez, option guru Shaeffer, the Cowboy, wizetrade, 4rxmade easy, options made easy etc. etc. that peddle systems.
I still did not acquire a good system. But manage to "swing" some profits from this arena thanks to many good postings from this forum.
Some one said in this forum,and repeated: Draw your line, and take action when price goes above or below your line. That is the best I heard. I got some lines, and indeed prices go above or below, I'm taking action... it's helping.
Best! HR

23 posts
msg #49368
Ignore jhar3
1/18/2007 6:56:21 PM

there is a very good program out there called stockshare v2, it gives you swing points ,fib levels,confluance,dma's, ob/os points and you can change the settings to whatever you like. check out there web site it cost around 300.00 bucks.

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