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Strategies & Market Trends : Harmonic Trading with The Phoenix -- Ignore unavailable to you. Want to Upgrade?

To: Dan Duchardt who wrote (844)	7/7/2003 4:57:44 PM
From: the-phoenix	Respond to of 941

Dan: The ratios that I questioned as "fibonacci" ratios were these: .786, .886, 1.272, .707, 1.414, .414, 2.24, 3.14 none of which can be derived from non-adjacent numbers in the fibonacci series using the method you describe. Walt Houston further insists that it is an error to mix ratios from the fractional series, such as 1/2, 2/3, 3/5, with ratios produced from the sectioning of the Golden Section, as I clumsily describe it in layman's terms, or what he calls the "Fibonacci Cascade". So Walt says it is a mistake to call .50, 2.0, 1.50, etc. fibonacci ratios. I must confess, I would prefer to leave these details to you mathheads <GG>. I guess one takeaway from this whole discussion has been that the use and labeling of "fibonacci ratios" is pretty arbitary in technical analysis, but the fact that so many people seem to use them makes this all the more surprising.

To: Dan Duchardt who wrote (844)	7/7/2003 7:10:24 PM
From: Ramus	Read Replies (3) \| Respond to of 941

Dan, You are describing characteristics of what is called the Fibonacci Cascade. It is a Fibonacci series constructed using PHI and phi and as you can see it is both arithmetic and geometric. Consider Fibonacci's series 1,1,2,3,5,8..... As you know fractions produced by adjacent members asymptotically approach PHI and phi. And if you construct any series based on sum of two as in Fibonacci you will construct an entirely different series but it's ratios will still converge to PHI and phi. Also, if you construct new series by sum of 3(Tribonacci) or 4(Quartonacci) etc these will converge to their own limits PHI' and phi'. However, only PHI and phi can satisfy the identity pair PHI-1=phi and 1/PHI=phi. None of these other PHI' or phi' can do this. Within this group of series the Cascade is unique. Now, when I set about to understand where these Fibonacci numbers on my retrace tool come from...I saw the basic series and the fractions series and their convergences. Then I saw that most of these "Fibo" numbers are just the powers of PHI and their inverses. But, this didn't account for .5 and 1...two numbers also seen on my Fibo tool. To go further I found out that we could construct a new arithmetic Fibo series based on PHI and phi and this is the Fibonacci Cascade. Phoenix shows this as the Greek geometers would do it by sectioning a line. The Cascade contains all the usual suspects including 1. But, it still doesn't account for .5. Now, after having gone to all this trouble to realize the unique properties of the Cascade. I figure someone would want to account for the missing .5 by saying "well it's in the fractional series right...1/2?" Yes but so is an infinite number of other numbers between 1/2 and PHI. Not a good idea...how do we separate .5 from everything else? In fact, given the other numbers that people use out there....how do the get those numbers into an intersection with the members of the Cascade?? Because the name of Fiboancci is somehow involved??? I'm all ears but so far all I've heard is hocus pocus. BTW, I'm with you in being skeptical about the use of these numbers. Populate your Fibo retrace tool with sixths and look at data and tell me that isn't very interesting. Point: this data is a mixture of random determination. It's not random nor completely deterministic...and this characteristic constantly morphs. It seems really wrong to try to apply fixed relationships in this manner. With this data if you look you're apt to see what you are looking for and in this case I don't think that's a good thing. I agree that there are people seeing these things. But, what I don't see is any statistical evidence that shows say a comparison of occurances of Fibo retrace values contrasted against anything else like sixths or sevenths or whatever....that shows there really is something to Fibo in price/time data. I also remain unconvinced. Walt

To: Dan Duchardt who wrote (844)	7/7/2003 9:13:22 PM
From: Lazarus_Long	Respond to of 941

I'm a long way from being convinced that the market turns at or near these numbers because of some fundamental law of nature as opposed to the expectations of the large number of people who follow them. How about chance? Message 19087892 If enough ratios are allowed, any maximum or minimum is bound to be close to one. And some slop is always allowed- -it is not expected that a maximum or minimum will occur precisely at one of the "Fibonacci ratios".