Help Needed with Placing Fibs

[januson]

Thank you all.. very nice comments. So to sum things up, I should move the fibs accordingly as the stock hits lower lows or higher highs.

So a fibtrader moves the fibs as the day goes on if needed...

But that will eventually means that older support/ resistance gets ignored and replaced by new? Have I missed something here?

Thanks for the links

[BlowFish]

Essentially Yes. Though of course you have to define exactly what a swing is to you. For a scalper it may be a 5 tick pullback for a broader time frame trader it might be the highest high in the last 5 10 minute bars etc. You have to be consistant and should pick something in tune with exactly what you are trying to measure.

[januson]

	Quote:	BlowFish
	Essentially Yes. Though of course you have to define exactly what a swing is to you. For a scalper it may be a 5 tick pullback for a broader time frame trader it might be the highest high in the last 5 10 minute bars etc. You have to be consistant and should pick something in tune with exactly what you are trying to measure.

Ahh okay.. I think I get it, so put in another way, the stocks essentially wave according to fibs undependendant the timeframe. So if one is looking for daytrades, would the fibs go from day high to day low.

I know there's a lot of nuances besides this basic stuff, but things are getting clearer

[james_gsx]

Hopefully this helps. There are several trades like the ambush which sometimes work, sometimes don't. I like to plot fibs and use them to find future support/resistance levels. Obviously I use the 127 as an extension to the current trend. So if the market is moving down like in my examples, I make sure the 127 is lower than the current price. If I used something like CL, then I would want it to be higher. I don't trade based off Fib lines, but I do like to know where they are especially on a daily basis.

This was from today, and I used the Fib lines during a range to plot where price would go if it broke the low. Notice how the 127 worked out very well for support.



I went ahead and plotted where the ambush zones would be.




Heres a closeup of the 61.8 and 127



Here are some daily charts of the YM and ES. I didn't really include the whole chart because it's rather irrelevant. price is what matters in these examples.



Now if you are a longer term trader, one could argue this would be the proper fib placement. It really just goes by what your trading plan and style. There isn't really a right or wrong way to do it.



Heres a shorter term view. I pointed out how the 127 line almost matches up with the open and close of the two candles back in January. I see this come up a lot with Fib lines, and I always find it interesting and it tends to be more powerful.



This is a weekly ES chart. I threw this one in here for fun, because I could see the market hitting those levels and I find it ironic (or not?) that the 127 nearly matches with the old support levels from 2004!




Hope it helps!