Understanding Fibonacci Numbers Edward Dobson Pdf

This is a book by Edward D. Dobson, the person that set up Traders Press Incorporated. The book was originally published in May 1979, and has gone through four printings, with the current book printed in August 2005. The title was apparently a quote by W.D. Gann on the 50% retracement phenomenon, which is the subject of this book.After reading a number of trading books, I have grown to enjoy reading trading books published many years ago because they seem to contain much more nuggets of wisdom with much less ‘marketing’ compared to books nowadays. For example, books by/on Livermore, Nicolas Darvas, Wyckoff are some great examples. One publisher I noticed that publishes these kind of books is Traders Press, hence I am always excited to check out books published by them.

I am not too sure whether the company is still surviving well as its website seem to be down the last time I checked. Nonetheless, it is interesting to pick up a book written by the person that set up the Traders Press.I have come across this 50% retracement concept a few times before:. One explanation I had read was that at the 50% mark, among the people holding the stock, half of the people will be losers (i.e. Those that bought at prices higher than the 50% mark) and half of the people will be winners (i.e. Those that bought at prices lower than the 50% mark).

Hence it is a level where there is “balance”. It’s an interesting concept, but for some reason, it is not something that makes intuitive sense to me, hence it did not stick. I had also seen the Fibonacci levels before but again that did not stick because I don’t see any sound logical reasoning behind those levels. Another time I came across a related concept was when I read an article by DBPhoenix on how a stock is strong if the price stays within the upper half of a bracketing consolidation. That I had understood but did not link it to the 50% retracement concept. The final thing that brought all of these concepts together, was when I read Wyckoff’s My Secrets of Day Trading in Stocks. There it clearly laid out the fact that it is extremely natural for healthy stocks to react, and how the reaction amount can help you assess how healthy is the stock (i.e.

The demand and supply). 50% was the key level highlighted, and how the stock moved from that 50% level helps to separate a healthy stock from a weak one.It was only after this “journey” that I was interested when I came across this book. Without the journey, I might have just swept this book aside thinking that it is some crazy idea that was borne out of looking for patterns when there are none.

So in a way, I was fortunate to have the experience of other related resources prior to reading this book.This is a pretty thin book, with about 60 pages of content. It comes with lots of diagrams illustrating the concept, as well as lots of charts of commodity contracts where this rule has played out very well.

I always like short books that explain their concepts in a concise, easy to understand manner, and this book is one of them.In conclusion, it is a good book to read, especially if you are unfamiliar with the concept. If you have swept this aside as pure mystical forecasting, this book helps you to understand that it is essentially a manifestation of supply and demand dynamics on the instrument.The 50% Retracement Rule or Halfway Point Method. After a major move in either direction the market has a tendency to retrace up to 50% of that move (Rule #41 of the 50 rules on How Young Millionaires Trade Commodities). W.D. Gann. You can make a fortune by following this one rule alone.

A careful study and review of past movements in any commodity will prove to you beyond doubt that this rule works, and that you will make profits following it. Burton Pugh. The 50% reaction is one of the most valuable of market habits and the trader should follow and profit by this most dependable of all market laws. This remarkable form of market action is far the safest and surest movement on which the trader can base his moves.

This is one of the most valuable market habits. Every swing either up or down will sooner or later be followed by a reversal of the market of half the distance covered by the swing. If wheat rallies twenty cents, it will decline ten cents.

The decline may be much more than ten cents, but you can be sure of the ten. Nearly all of the small rallies and reactions of the day show the same habit. It is especially valuable in mild bull or bear markets as such markets work up or down by orderly steps. These 50 percent reactions are caused by many of the smaller traders taking profits and waiting for this reaction to ‘buy in’ again.

Chester Keltner. A characteristic of markets is that they fluctuate. These fluctuations do not occur in a set, precise pattern.

But they do tend to have certain general characteristics, and it is these general characteristics that provide the basis for the theory of action and reaction. The theory is that a reaction in an advancing market should retrace roughly one-half of the previous advance. Also a rally in a declining market should retrace roughly one-half of the previous decline. Larry Williams. Often one will see a 50% correction in terms of time consumed by the move. That is, an upmove which takes place over twenty time periods (daily, hourly, weekly, etc.) will tend to be followed by a correction which consumes ten time periods before the original move resumes.Mechanics of Applying the 50% Retracement Rule.

Select identifiable points. The point from which to measure should be a discernible high or low point on the chart. Use intraday extremes. I always use the intraday extreme as the point from which to measure, once I have decided which high or low points I am comparing. This seems to work much more consistently than using the closing level.

Handling trend moves with multiple intermediate retracements. If the market retraces more than halfway back, the reaction will quite often terminate at the 50% level as measured based on the “one level above” move (which is longer in length), as opposed to the immediate move. If you have multiple moves of different lengths (but of same direction) to choose from in order to calculate an expected retracement level, calculate the 50% retracements for all the lengths and average them. Archives.

(1). (1). (1). (1). (1).

(1). (2). (1). (4). (2). (1). (1).

Ed Dobson

(1). (3).

(1). (1). (2). (3). (7). (2).

(9). (1). (1).

(5). (3). (9). (26).

(11). (14).

(20). (6). (6).

(5). (6). (7). (7). (4). (9). (2).

(5). (5). (8). (4). (1).

(1). (2). (6). (18). (4). (2).

(1). (5). (6). (9). (11).

(7). (7). (11). (9). (10).

(3). (4). (13). (2). (1). (9).

(18). (23). (1). (2).

(1). (1). (1). (2). (1). (5).

(4). (5). (4).

Understanding Fibonacci Numbers Edward Dobson Pdf Download

(9). (1). (2). (4). (2). (1). (1).