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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures -- Ignore unavailable to you. Want to Upgrade?

To: Chip McVickar who wrote (38426)	10/23/1999 6:29:00 AM
From: GROUND ZERO™	Read Replies (1) \| Respond to of 44573

Fibbonacci was a mathematician and he studied mathematical relationships in the natural world... he observed that there is a mathematical ratio that prevails throughout everything and that this mathematical relationship is based on a ratio of 1.618... when he studied the architectural structure of the great pyramids he found that even they were constructed according to that ratio... the ratio is in perfect correlation to pi (the Greek letter)... the spiral galaxies in deep outer space have the same ratio in distance to each outer ring... this goes on..... there is so much to the Fibbonacci ratio that it has filled numerous books, I recommend one called The Divine Proportion where it details how the natural beauty in nature is dependent upon the same 1.618 ratio... this book has nothing to do with markets but will give you a great introduction to this remarkable phenomenon... this may not be in that particular book, but even the human face is constructed on that ratio and what we human's perceive as an 'attractive' face is one where the ratio is found in the placement of the nose, mouth, eyes, and so on..... So, what's the big connection between the Fibbonacci ratio and these markets? Plenty... I'm not claiming to be any expert on the fib ratio, but I have studied it's relationship in the natural world and I do see many people misunderstand and therefore misapply the ratio to these markets..... The Fibbonacci theory as applied to these markets would therefore maintain that since these markets are also part of the natural world, that they should also follow the same natural laws... and they do..... in the simplest sense, since the ratio lends a natural sense of appeal and beauty to our eyes, the markets look the most appealing to us in an uptrend when the chart has completed a fib movement, this visual appeal stirs within us the greatest temptation to buy... the reverse is also true, that the markets look the worst to us in a down trend when the fib ratio has been completed, and this stirs within us the greatest temptation to sell..... so, we experience the greatest temptation to buy and sell these markets only because the charts look appealing and pretty to us and not because it's the right time for a serious trade... as a result of this, we enter new positions at the worst possible time and we lose our butts in the process.....<g> The 50% retracement concept may be real, but has nothing to do with Fibbonacci..... Here's a key: I mentioned a spiral... if you construct a true fib spiral on a transparency, a spiral that has a distance of 1.618 to each next outer wall at every 90 degree turn and place the center of the spiral over any pivot on a chart, you will see how each outer wall is resistance and support, depending on how you place it... the amazing thing about it is that it works forward as well as backward in time, and even if you flip flop the spiral it makes no difference... these chart patterns that we look at all the time are really three dimentional fib spirals laid out on a two dimentional flat surface..... GZ

To: Chip McVickar who wrote (38426)	11/10/1999 3:10:00 AM
From: Darrin Vernier	Read Replies (1) \| Respond to of 44573

>>A 50% move is not a fib number<< Arithmetic, Harmonic, Geometric, same difference. Look at it as 8ths. 1/8 2/8 3/8 4/8 5/8 6/8 7/8 8/8 .125 .25 .375 .5 .625 .75 .875 1. That's the arithmetic series. The 'fibs' are simply the geometric equivalents. So are the 'fibs' so important, or just a 'fib'? Gphx --------------------------------------- Books for Gann Traders geocities.com