# Fibonacci Indicator? Is it a big Joke?

## Admin note: Thanks again to Tony for this piece- interesting reading

Lot of traders "friends" always asking me why I don’t use Fibo indicator … the answer is simple … why to follow a setup of lines invented by an old mentality “Fibonacci” … this indicator is only for marketing, market never did respect these levels :)

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0, 1,1,2,3,5,8,13,21,34,55,89,144 … in the past an old indian mathematician got an idea of skiping numbers because he was lazy in calculations ... and here we are, we endup with Fibonacci numbers :)

In the Fibonacci sequence of numbers, each number is the sum of the previous two numbers, starting with 0 and 1. This sequence begins 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987 ...

So let’s study the reasoning how this idea of calculation did start, with our lazy old indian mathematician who wanted to skip numbers ...

0+1 = 1

1+1= 2

2+3= 5

5+3= 8 …

and we end up with the great fibo indicator “what a joke”

Leonardo Pisano “Fibonacci” he took this idea of reasoning from the Hindu-Arabic numeral system, this method was simply good for bookkeeping in the years of 1150’s as they didn’t had calculators …

So why all this noise about Fibonacci in Forex in 2011? we don’t do bookkeeping on our trading accounts? also the market is alive and it's not a stock in a warehouse to use mathematics on charts ...

The answer will be, fibo is only for marketing, marketing, marketing … yes Forex marketing, a new trader come to the Forex arena knowing nothing about Forex … a professional trader “professional marketing trader” will start explaining indicators and calculations … the best jock of all is the Fibonacci … all Forex forecasts are based on predictions, same is astrology … and we all know how much women like astrology ... trying to know the unknown of the future hahaha

Predictors use the weakness of human to make them live in marketing hallucination "astrology hallucination or in forex Fibo hallucination" saying the market move according to an indicator as the “Fibonacci” and respect this levels …

Let me tell you in my 5 years I never seen the market respecting any level of Fibo … the Forex market is a wild market in most cases don't respect or follow any indicator at all ... in other words Forex is unpredictable :)

Just the fan's of Fibo when the market do it’s move they place Fibo to say market did that according to Fibo Level … buy turning it up or down or adjusting it to fit to there marketing story analyzing the past ... when it come to predicting the future 95% fail big as it will be based on pure luck :)

Lets base common sense on the Fibo indicator, 1+1= 2, 1+2=3 … till now all answers are present 1,2,3 then the surprise 2+3=5 where the 4 … market pass on many levels with 4 and stop on 40 or 44 even 444 … 5+3=8 … where is the number 6 or 7 … mmmmm on chart we are not in a warehouse doing bookkeeping … market move by passing according to full numbers from 1,2,3,4,5, … till 100 and so on ... i never seen the market skipping a level on chart.

Lets go deeper with Fibo "the hindu-arabic numeral system" stolen by Leonardo in the past and known under his name as Fibo ... It's simply mathematics … meaning all mathematicians will be great traders … but in forex you can't calculate it as 1+1=2 ... as the options how the market will move is open wild on both ways up or down ;)

From 3 years i met a trader who is an engineer … he say he do chart engineering  … I wonder if in life he will do foundations in the sky and build down a building ... shorting the sky … well charts moves is based on human judgment … there’s no natural law on the chart to respect always same as in nature for example gravity … because there's no gravity on charts ... if one big player start shorting the market and the market go down, simple as that …

Big players know all the marketing tools and all ways used by traders ... also they challenge you to publish them always ... for after to push the market in one way and to let all indicators approve a move direction … then surprise surprise market went the other way …

When the market change direction the best i like is when all professional traders voices start going on TV's and online websites ... saying market will go on the other way changing all the concept of the yesterday study  … putting a new Fib levels ;)

If you watch closely Forex predictors "Videos analyzing the market" ... in most cases they will end up asking them selves and the audience questions ... where the market will go? by saying ... it's clear on chart? dose that make sense? it will go down ... where it will go or up or down? ... well if the market will go up or down, that is the big question all traders want to know :)

Briefly all chart indicators are simply used for marketing, marketing, marketing  ... with time a professional trader will trade based on a naked chart or using simple indicators which calculate the trend direction and when the trend change direction to be aware what's going on in the market … just I wanted to write this article about Fibo indicator because many lately was giving lot of importance to this big Joke indicator making it the most funnier indicator in Forex  which always make me laugh when I read studies based on it.

# Why 95% of traders loose?

Compliments from Tony El Fata, one of our favourite Forex commentators and writers.

Admin note: Thanks for the excellent article, hope this will shed some light to our readers on forex pitfalls and understanding one's inner trader.

To understand this truth, we need to study human weaknesses very good when it's related to the world of investment, because behind everything in life "banks, companies, countries, ..." there's human and behind Forex charts moves there's human ... speculations and decisions from human make the market move ... market moves is translated as charts crazy moves.

Fx charts moves prove clearly human weaknesses in taking a united decision as it move in full chaos each single minute during trading time "watch 1 minute chart"...

if we want to make a list of human weaknesses concentrating on traders weaknesses according to my 5 years of experience in Forex ... the list of human weaknesses is based on my observations for more then 1000 traders trader i meet during the past years also based on my personal weaknesses as a human:

1- Human Greed, is the main because behind why 95% of traders lose in Forex ... and that greed expand to casinos, poker and all the aggressive games human play or have access to them ... when a human bet on all his fortune to double or triple it's money in a short time its the greed human weakness controlling his actions ... human greed is attached strongly to the nature of a human because the life of a human is short ...

50 or 60 years if someone is extremely lucky will see 80 or 90 with a good brain... and because of this speedy life where a year pass in a blink of an eye ... the greed of human lead them to greedy aggressive investments to gain money in a fast way ... and bank know this fact so good ... what big Forex players do, they hunt greedy traders who expose there money by going against the mass or against the trend ... in the trading world we call it correction or market changing direction ... Greed will always make you lose because the market is full of surprises ...

this is why a trader need to have a pure view about the risk involved in Forex and calculate his affordable loses before he calculate his winnings ... and if you can afford losing stop lose in a trader then you can open this trade, ... wisdom in trading is to control your greed or eliminate your greed one time and for all ... because always you will lose or you might win in Forex because nothing is 100% in Forex and wisdom is to lose small when the market go against you "cut lose small & let profit grow"

- do you watch charts for 6 consecutive hours and you don't feel board?

- do you trade with vengeance and an extreme aggressive way when you lose?

- do you try to go against the trend in the extreme rush market hours? challenging the market?

- do you always end up increasing your stop lose where you will end up with - 300 or -400 pips, never willing to accept you was wrong in your trade?

- do you keep losing trades open for days, weeks, months even you add more money to your account to lose more on the hope the market switch direction and go your way? never accepting you was wrong in your trade?

- do you keep on trading in a bad day even if you last 2 or 3 trades consecutively in one market season?

- do you read important news each day before you enter the market?

- do you keep wake-up at night to trade till the morning? yes those who can't sleep they are lazy because they can't relax and control there Forex passion to go and let there brains get the normal daily rest it need.

- do you keep you enter trades based on your personal feelings without any system at all or any important news which back up your trades?

- do you trade without clear stop levels as an exit point or take profit level?

This is why 95% of traders lose in Forex ... because of human natural weaknesses "greed + fear + ego + laziness ... yet we didn't finish our study for tonight ... and human weakness is related in a very strong way to the weakness of the body...

Briefly to become a brave profitable trader you need to keep your positive thinking all the way and to work hard all the time to become better with time, trading Forex is one of the hardest tasks in life, because you might do lot of work and results will be bad ... and it's a long journey which need patience, discipline, control, braveness, honesty, transparency, humbleness,wisdom ...

"trading is about personality, to become a brave trader you need to have a brave heart & a wise brain"

Tony