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 :)
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.
Be Wise Traders & Happy trade everyone :)
