Fibs

Do fibs fib? Yes, my poor attempt at humor. I'm not feeling so great today. Puked my breakfast. Didn't get good sleep last night as I woke up at 12:30 am and was up for 3 hrs. Congested, nauseated, body aches, sneezy (and feeling a little dopey not because I took any meds rather just not real clear headed).

So, take this blog entry with a grain of salt. I've felt worse before, but since I don't often get sick, I do tend to whine and feel sorry for myself a lot during this time. Inspite of not feeling so well, my virtual trading account is doing okay this morning and on 1 contract, it's made $775 in less than half the trading day.

Some of the money was made in the middle of the night and it would've been a bit more, but my computer while I was gone decided to do an update and restarted my computer, which did not allow my virtual position to go through.

Anyway, I just wanted to talk a little about fib lines. I haven't been a big fan of this until the past month or so. All those lines and numbers tend to make me a little nuts, but what I've found is the 50% is often a very crucial number. That is the number that seems to even out buyers and sellers, putting things on even keel again.

Perhaps I will do a video some time, but for right now, I'm just going to write about it.

My Fib tools I use are Fib Support/Resistance where I have settings of 0, 0.382, 0.5, 0.618 and 1. I leave the rest out as it clutters up my screen and I don't find the other numbers very useful.

I've often found that as the ES moves up or down, it often retraces back to 50%. Sometimes it will go as far as 61.8%, but that's usually more like tails. 50% seems to be the demarkation. However, just as in a trade I just finished, it only pulled back 0.382 and that was good enough. I don't always know where it will stop, so you have to be cognizant of this.

The cool thing is that it DOES stop at those numbers, so don't tell me the market is random because it's not.

The key is to be insync with the market, let the gorilla lead and not that it has to do anything you want, you just go with the flow. It seems I am sort of going with the flow of the market right now, but my head hurts and I sort of have an earache, so this will be it for me for today.

I'm now at $812.50. That'll probably be it for my real time streaming practice. Today is an emotional day for many, as it's Sep 11th.

The other tool I use for Fibs is the Fib Expansion. Instead of a pullback/retracement that is what I use the Fib Sup/Res, this is to determine how far it will continue to go in your favor, possibly. Note that I never know what will happen in the market, rather I can make some determinations based upon its history, what it's currently doing and assess from there. You need to make sure that you have a plan for whatever happens.

The settings for my Fib Expan are at 0, 1, 1.618, 2, 2.618. Those seem to work for me. How you would use this is put the 1 at where the high (or low) is, then take the 0 and put it on the low (or high). Okay, was that confusing? If you're in an uptrend, put the 1 at the high and the 0 at the low. Where the 2 ends up is double the move of what it just made. If it's at 1.618, than that is 61.8% above the high. It works similarly in a downtrend.
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