With this post I would like to offer a modified Fibonacci AFL (download link available @ comment area, just below of this post). But first of all some thoughts on Fibonacci.
Each person has personal tolerance level for risk and also has a level of greed. In losing trade we close the trade and stop the pain. This is our risk/pain tolerance point. Similarly, in a winning trade, at a point our profit seems in such a level that we become worried, and lock in our profits. This is our greed tolerance level. This level very from person to person.
Meanwhile a chart using modified Fibonacci AFL:
If we take a crowd of traders, say 50,000, we can say that they have a risk/greed tolerance value.
Same technique can be applied for a different group of 50,000 traders. It means every group of traders have an average risk/greed tolerance value.As most traders are human, we can say that average risk/greed tolerance level for any large group would be more or less same.
Thus short-term traders, and long-term traders have their have risk/greed tolerance points. If we can guess where their points coincides it would be very valuable for us. Where they coincide this must be a profitable place to trade.
That is exactly what Fibonacci ratio do for the share market. With Fibo ratios we can calculate the probable future action of the traders. This helps identity optimum entry and exit points. But why do Fibonacci ratios work? Because we are human, because we are part of nature. As Fibonacci numbers are everywhere in nature, even in the stock market.
Each person has personal tolerance level for risk and also has a level of greed. In losing trade we close the trade and stop the pain. This is our risk/pain tolerance point. Similarly, in a winning trade, at a point our profit seems in such a level that we become worried, and lock in our profits. This is our greed tolerance level. This level very from person to person.
Meanwhile a chart using modified Fibonacci AFL:
If we take a crowd of traders, say 50,000, we can say that they have a risk/greed tolerance value.
Same technique can be applied for a different group of 50,000 traders. It means every group of traders have an average risk/greed tolerance value.As most traders are human, we can say that average risk/greed tolerance level for any large group would be more or less same.
Thus short-term traders, and long-term traders have their have risk/greed tolerance points. If we can guess where their points coincides it would be very valuable for us. Where they coincide this must be a profitable place to trade.
That is exactly what Fibonacci ratio do for the share market. With Fibo ratios we can calculate the probable future action of the traders. This helps identity optimum entry and exit points. But why do Fibonacci ratios work? Because we are human, because we are part of nature. As Fibonacci numbers are everywhere in nature, even in the stock market.
link for modified fibo afl : https://sites.google.com/site/antigamblers/files/modifiedautofib.afl?attredirects=0&d=1
ReplyDeletePiash Vai..What is the difference of Modified Fibonacci with the kpl?....Can you please explain?
ReplyDeleteIn broad term, we can use Fibonacci to predict support and assistance levels. Whereas with KPL we take the final decision of entry or exit. Is it Clear now? If No, let me know.
ReplyDeletepiash vai, nice bro......but ei afl er use ta arektu details a bolle better hoto as for example.....eikhane jei fibo level gulo pacchi is it for upward extension or downward extension...as we see in ami broker...the fibio retracement as upward/downward with/without extensions......so, ei modified afl e ami kivabe supportlevel or resistance level ber korbo....hope could make my queiry clear.....
ReplyDeleteHi,
ReplyDeleteEven after changing colour and parameter settings in amibroker chart on restarting it gives the default colour and parameters...i want my settings to be permanent in charts as well as indicators...how to do that so that it loads my setting even after amibroker crashes..