chartboy - I was wondering why you selected the 113 level on GLD
but a Fib confluence is certainly something to watch based upon the
longer term chart.
Posted by chartboy on 23rd of Sep 2011 at 03:07 pm
Hi Steve, the 113 pivot was the last major low in the formation
of the 2010 base. That low is for all itents and purposes the last
important low prior to...and therefore the true starting point
of...the currrent rally which is now being retraced.
Posted by chartboy on 23rd of Sep 2011 at 03:31 pm
A common mistake most traders that are new to Fibo's make is to
just look for the lowest spot on the chart and presume that is the
place to start the Fib's. In actuality the correct place to start
your fib brackets it at EVERY major pivot low. What that means is
that the guys that are doing it right and looking at all of the
series of pivots and brackets will be spotting the highest
probability "Fib Clusters" into which to look for a reversal.
More importantly, by definition, if your trading a security
like GLD that is already heavily oversold and nearing a Fib
zone...the guys that have identified all of the proper pivots,
(like the 113 pivot in this case instead of just the 112), will
have Fib support sitting right above those that the less
experienced are using. What that means is that the guys using the
correct low of 113 in this case are essentially being back stopped
by all of the other guys that are simply using the much more
obvious 112 low.
As a general rule...you should always be starting your initial
watch for retrecement zones using the last swing pivot within the
initial base prior to the breakout for this reason...
Posted by chartboy on 23rd of Sep 2011 at 03:51 pm
I think you may be missing the point..there is no such
thing as "THE" pivot low....every chart has a "SERIES" of
pivot lows. An experienced Fibonacci chartist is always going to
be using these significant series of pivots to build their
charts and to properly identify "Fib clusters".
As the "smart money" traders that are doing this will by
definition, in instances like this, have a series of Fib pivots
just a fraction of a percent above the "obvious" pivots used by
most amatuer traders....In instances like this, (GLD), where the
market is already very over extended...the smart money
guys will always be watching for Fib reversals right above
those that the amateurs are using. Not only does that allow them a
backstop, (from all of the orders placed by the amaturer Fib
watchers just below), if they go long on a reversal
pattern into the zone that then the security sees a slightly lower
low....but they also catch many of the reversals that
anyone waiting for the obvious Fib zones to be hit, (at
lower prices), will miss as the price reverses from the "smart
money" buying before it even falls to the "obvious" Fib levels
identified off the single deepest low on the chart.
Chartboy, thanks for that - this is the kind of info that really
helps a trader like me, who fancies himself as "not quite a
greenhorn anymore", but certainly not as wily as the real pro's.
Any pointers/links for further eading on this topic would be
great.
Matt, Steve, yet another example of why this is such a superb
website, service and trading community spirit!
Posted by chartboy on 23rd of Sep 2011 at 04:08 pm
Definitely...get a copy of "Derrick S. Hobb's book - Fibonacci
trading for the active trader".
While I believe the book may be out of print and as a
result the price has risen a bit... If you are serious
about learning about using Fibonacci's the book is probably one of
the top resources out there.
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chartboy - I was wondering
GLD
Posted by steve on 23rd of Sep 2011 at 02:58 pm
chartboy - I was wondering why you selected the 113 level on GLD but a Fib confluence is certainly something to watch based upon the longer term chart.
Hi Steve, the 113 pivot
Posted by chartboy on 23rd of Sep 2011 at 03:07 pm
Hi Steve, the 113 pivot was the last major low in the formation of the 2010 base. That low is for all itents and purposes the last important low prior to...and therefore the true starting point of...the currrent rally which is now being retraced.
Why not 102.28?
Posted by angelo851 on 23rd of Sep 2011 at 03:09 pm
Why not 102.28?
A common mistake most traders
Posted by chartboy on 23rd of Sep 2011 at 03:31 pm
A common mistake most traders that are new to Fibo's make is to just look for the lowest spot on the chart and presume that is the place to start the Fib's. In actuality the correct place to start your fib brackets it at EVERY major pivot low. What that means is that the guys that are doing it right and looking at all of the series of pivots and brackets will be spotting the highest probability "Fib Clusters" into which to look for a reversal.
More importantly, by definition, if your trading a security like GLD that is already heavily oversold and nearing a Fib zone...the guys that have identified all of the proper pivots, (like the 113 pivot in this case instead of just the 112), will have Fib support sitting right above those that the less experienced are using. What that means is that the guys using the correct low of 113 in this case are essentially being back stopped by all of the other guys that are simply using the much more obvious 112 low.
As a general rule...you should always be starting your initial watch for retrecement zones using the last swing pivot within the initial base prior to the breakout for this reason...
Hopefully this makes sense...
Chartboy - excellent explanation and
Posted by steve on 23rd of Sep 2011 at 04:08 pm
Chartboy - excellent explanation and thanks for sharing with the members.
As always...my pleasure.
Posted by chartboy on 23rd of Sep 2011 at 05:02 pm
As always...my pleasure.
The low in 2010 was
Posted by angelo851 on 23rd of Sep 2011 at 03:37 pm
The low in 2010 was in February at 102? Why is that not the pivot low?
I think you may be missing the
Posted by chartboy on 23rd of Sep 2011 at 03:51 pm
I think you may be missing the point..there is no such thing as "THE" pivot low....every chart has a "SERIES" of pivot lows. An experienced Fibonacci chartist is always going to be using these significant series of pivots to build their charts and to properly identify "Fib clusters".
As the "smart money" traders that are doing this will by definition, in instances like this, have a series of Fib pivots just a fraction of a percent above the "obvious" pivots used by most amatuer traders....In instances like this, (GLD), where the market is already very over extended...the smart money guys will always be watching for Fib reversals right above those that the amateurs are using. Not only does that allow them a backstop, (from all of the orders placed by the amaturer Fib watchers just below), if they go long on a reversal pattern into the zone that then the security sees a slightly lower low....but they also catch many of the reversals that anyone waiting for the obvious Fib zones to be hit, (at lower prices), will miss as the price reverses from the "smart money" buying before it even falls to the "obvious" Fib levels identified off the single deepest low on the chart.
Chartboy, thanks for that -
Posted by isplat on 23rd of Sep 2011 at 04:05 pm
Chartboy, thanks for that - this is the kind of info that really helps a trader like me, who fancies himself as "not quite a greenhorn anymore", but certainly not as wily as the real pro's. Any pointers/links for further eading on this topic would be great.
Matt, Steve, yet another example of why this is such a superb website, service and trading community spirit!
Thanks to all, and have a safe, restful weekend.
Definitely...get a copy of "Derrick
Posted by chartboy on 23rd of Sep 2011 at 04:08 pm
Definitely...get a copy of "Derrick S. Hobb's book - Fibonacci trading for the active trader".
While I believe the book may be out of print and as a result the price has risen a bit... If you are serious about learning about using Fibonacci's the book is probably one of the top resources out there.