Using Fibonacci to determinate market goals - Part II

Expert: Facundo Molina, Analyst at Trader College.

Topics to be covered during the sesion:

• Final Results, and Conclusion
• Model’s description
• Discover great results applying Fibonacci

Who is Facundo Molina?
Facundo Molina has a BA Business Management degree at Universidad Nacional del Sur, Argentine. His degree thesis was based on Fibonacci theory applied to markets.

He also works as technical analyst and professional trader in the Forex market since 2004, managing an important portfolio for IFX MARKETS Inc, Boston, USA, trough Trader College, where he also form new traders for the Currency Market.

Session material:

PART 4
• Model’s description
• Step 1: Sessions under study. Application of Fibonacci’s ratios, and Zig Zag Oscillator.

PART 5
• Model’s description (Cont.)
• Step 2: Detection of Major and Minor trends. Price rallies measure. Calculate of target price for each rally.
• Step 3: Define the Target Zones, and test the truthfulness of the propose objective.
• Step 4: Calculate the number of retracements which go to the objective zone inside the dominant trend.

PART 6:
• Final Results and Conclusion.

*** SEE the Educational Informer about Fibonacci using this link:

http://www.fxstreet.com/education/technical/using-fibonacci-to-determinate-market-goals/

Speech Material:

FXstreet Moderator (Sep 20, 2006 9:26:19 AM)
Good morning, good afternoon, and good evening to all of you joining us today from different parts of the world. This is Mercè Francisco, Live Session Moderator, and I want to welcome all of you to today's Live Forex Expert Question and Answers session.

FXstreet Moderator (Sep 20, 2006 9:46:47 AM)
This Q&A Sessions allows users to start asking live questions from the very first moment of the chat.

FXstreet Moderator (Sep 20, 2006 9:47:32 AM)
Please prepare any questions you may have for the expert.

FXstreet Moderator (Sep 20, 2006 9:52:18 AM)
Welcome to the Session. Today I am delighted to welcome our guest speaker Facundo Molina, Analyst at Trader College.

Facundo Molina (Sep 20, 2006 9:54:05 AM)
Good afternoon, good morning every one. Is a plesure for me to be here today. I hope you enjoy this session.

Facundo Molina (Sep 20, 2006 9:54:58 AM)
Today we will continue talking about Fibonacci, and his retracements. Fill free to ask me any question.

Facundo Molina (Sep 20, 2006 9:58:18 AM)
Last session we discuss about how to use Fibo retracements in Forex Market, if you have any doubt about, you can ask today, too

Facundo Molina (Sep 20, 2006 10:01:22 AM)
According the present study, Fibo retracements are quite reliable in the currencies market. As you can see in the final results, we find a rate higher than 70%.

FXstreet Moderator (Sep 20, 2006 10:04:58 AM)
Questions

Guest_manolonlonlon (Sep 20, 2006 10:05:09 AM)
Would you consider a fibo level invalid once it has been penetrated back and forth or would you still give it some credibility?

Facundo Molina (Sep 20, 2006 10:06:14 AM)
Good question.

Facundo Molina (Sep 20, 2006 10:07:32 AM)
All Fibo rallies are important, even been broken as long the price moves in between the max and min, you use to draw it.

Facundo Molina (Sep 20, 2006 10:09:27 AM)
As we see daily, there are more probability after the price has broken a Fibo to moves to the next, stop there and then come back to the next ratio or came back to the one broken at first place

Facundo Molina (Sep 20, 2006 10:11:39 AM)
In fact, there are more chances that price break 2 ratios and come back to the first, that go straight to the third o fourth ratio.

FXstreet Moderator (Sep 20, 2006 10:12:49 AM)
how i can use fibonacci arc? Guest-laspine

Facundo Molina (Sep 20, 2006 10:15:23 AM)
Well, in fact, it works just the same as Fibo Fans, so you must draw it between max and min. Both ot them show you supports and ressistances zones.

Gramps11 (Sep 20, 2006 10:15:50 AM)
not clear on what top and bottom to use for fib. measurement for day trade on 15 minute chart

Facundo Molina (Sep 20, 2006 10:18:20 AM)
I prefer to use 4 hour or Daily Chart to draw Fibo levels. Firstly I recomend to apply Zig Zag Oscillator in bigger time frames, to determinate most significant max and min. Those points are respected by the market in all time frames, including small ones.

Guest_leonardogmi (Sep 20, 2006 10:18:42 AM)
criticers of Fibonacci Theory argue that the fibonacci levels works because it´s used by large number of traders around the world, regardirng this matter, do you think that fibonacci retracements works only for that reason

Facundo Molina (Sep 20, 2006 10:21:17 AM)
Well, in my opinion this point of view has no bases.

Facundo Molina (Sep 20, 2006 10:22:40 AM)
Fibo is applied in a lot of natural manifestation, not only in Finnacial Markets. As you can see in the Study published in Fxstreet, there are many examples of this manifestations.

Facundo Molina (Sep 20, 2006 10:24:16 AM)
Inside finnacials markets, if you try to use Fibo levels in ones that presents low volume, or small number of player, may be you could not find good results.

Facundo Molina (Sep 20, 2006 10:28:11 AM)
But in forex markets, where a thousand of players all around the world with their decissions move the price, and just a very small number are traders. It is impossible, as i see, that if all of them apply Fibo, moves the price by their own.

Guest_Valeria (Sep 20, 2006 10:29:55 AM)
Can yo explain the different results we can obtain in trend or against trend?

Facundo Molina (Sep 20, 2006 10:31:11 AM)
As I explain in the conclussion of the study, we applied Fibo Retracements in both ways.

Facundo Molina (Sep 20, 2006 10:32:36 AM)
I mean, in trend and against the main trend. But we find excellent results just in the first case.

ddesmara (Sep 20, 2006 10:33:01 AM)
How and where do you decide to place the Fibo indicators on a chart

Facundo Molina (Sep 20, 2006 10:33:54 AM)
As I explain before, I recomend Zig Zag Oscillator to draw the max and min.

Facundo Molina (Sep 20, 2006 10:35:48 AM)
I have found an excellent tool in this Oscillator. You can test the system, changing the inclination degree. By default Metaquotes set 12.

Guest_leonardogmi (Sep 20, 2006 10:36:16 AM)
i use trhee indicators in my trading: RSI, MACD and CCI; fibo retracements work well with any indicator or system?

Facundo Molina (Sep 20, 2006 10:37:10 AM)
We find very good results combining Fibo retracements with other indicators and oscillators.

Facundo Molina (Sep 20, 2006 10:37:46 AM)
And using Fibo numbers to set this indicators and oscillators.

Facundo Molina (Sep 20, 2006 10:38:41 AM)
Personally, I prefer to use Fibo retracements to find Supports and Ressistance level, and then use the others tools as a triggers.

Facundo Molina (Sep 20, 2006 10:39:26 AM)
We have found excellent results with CCI, in flat markets.

ddesmara (Sep 20, 2006 10:40:56 AM)
Can you provide some sample charts showing your primary indicators via a link

Facundo Molina (Sep 20, 2006 10:42:15 AM)
you can send me after the session, and i will gladly send you some examples.

caidfw (Sep 20, 2006 10:43:12 AM)
do you think is valid to draw a fibo inside another one, let's say hourly fibo inside the daily one

Facundo Molina (Sep 20, 2006 10:43:51 AM)
Yes, of course. Both of them are usefull.

Guest_leonardogmi (Sep 20, 2006 10:45:56 AM)
the widethe time space, the more accurate the fibonacci? i mean: is better use it in a 5 minute graphic o in 1 hour?

Facundo Molina (Sep 20, 2006 10:46:41 AM)
Well, as i said before. Both of them are usefull.

Facundo Molina (Sep 20, 2006 10:48:35 AM)
But you must consider that the Fibo levels in bigger time frames are more important than the ones in the lower time frames.

FXstreet Moderator (Sep 20, 2006 10:50:26 AM)
is there pair that retracemets are always at the same level? Guest-laspine

Facundo Molina (Sep 20, 2006 10:53:15 AM)
As we see daily, there is no only a level for a pair. I mean that in all of the pais under the study, the price moves to all ofo Fibo Ratios.

Facundo Molina (Sep 20, 2006 10:54:39 AM)
But I would tell you that I can appreciate that after a fast trend movements, the price usually rebound to 14,6% level ar first time.

FXstreet Moderator (Sep 20, 2006 10:55:32 AM)
Last Question

Yukoner (Sep 20, 2006 10:55:38 AM)
in case this wasn't asked.... what about using fibo numbers with ema's?

Facundo Molina (Sep 20, 2006 10:57:55 AM)
Well, In my trading day, I applied Fibo to knows the most important supports and ressistances. Then, when the Emas give me the triggers, I will have the stop loss level and the take profit.

Facundo Molina (Sep 20, 2006 10:58:41 AM)
I mean, that I combined both in my trading day

Facundo Molina (Sep 20, 2006 10:59:46 AM)
As additional information, I set EMAs with Fibo numbers. I prefer to use 3, 5, 21, 55.

FXstreet Moderator (Sep 20, 2006 11:01:10 AM)
That’s all we have time for Today.

FXstreet Moderator (Sep 20, 2006 11:01:25 AM)
Thank you very much for that Facundo.

Facundo Molina (Sep 20, 2006 11:02:53 AM)
Thank you very much to join this session. I really hope to be usefull for your trading.

FXstreet Moderator (Sep 20, 2006 11:03:16 AM)
Thank you all for your participation. See you soon!

Facundo Molina (Sep 20, 2006 11:03:27 AM)
If you have any additional doubt, you can write to facundomolina@gmail.com or info@tcollegeweb.com

Facundo Molina (Sep 20, 2006 11:04:18 AM)
See you soon.

FXstreet Moderator (Sep 20, 2006 11:23:41 AM)
Now Forex Showroom! Today we will talk with Robert Green, author of The Tax Guide For Traders. Come talk with him!

FXstreet Moderator (Sep 20, 2006 11:24:36 AM)
You can use the link in 'Live'.