December 29th, 2007
The Secrets Of Slippage And Fibonacci Price Analysis For Placing Stops
“How many times have you placed your stop at a key Fibonacci retracement target and gotten hit by the locals and stopped out? With everyone using Fibonacci numbers, you have to be one step ahead to win the race. Here are some tips. Fibonacci numbers work because crowds–including crowds of numbers–are dynamic systems that conform to mathematical laws. If you have ever been to the Museum of Science and Industry in Chicago, you may have seen the machine there that sorts balls randomly into eight slots and at the end of the run, the balls form a bell curve. Likewise, the Fibonacci numbers of .362, .500, .618, 1.618 and 2.168 etc., create important, predictable price value–even in the wild chaos of 400,000 T-Bond contracts traded daily in the pits.