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About stoploss and fibonacci retracement.

Discussion in 'Technical Analysis' started by sanjay_sansanwal, Aug 5, 2012.

  1. sanjay_sansanwal

    sanjay_sansanwal Contributor

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    Dear shabbir can u please explain us how do u calculate the stoploss that it is fair enough to trade or it is far to avoid the trade cause sometime u said stoploss is far so it is risky trade better to avoid.
    Please explain us about ur view of stoploss to trade or not to trade.

    Also I have tried so many times to understand fibonacci retracement but unable to do so which u described in ur ebook of page no.31.
    On page no 31 u have pick(1) 5345 is 0.0% then 5566.50 is 23.6% then 5703.50 is 38.2% then 5814 is 50% then 5925 is 61.8% then 6062 is 76.4% and pick (2) 6283.50 is 100%.
    Now my ques. is how do u calculate this percentage cause if I calculate 23.6% of 5345 answer comes to 1261.42 and if I add 1261.42 in 5345 then answer comes to 6606.42 but u have mentioned 5566.50 is 23.6%.
    And this thing applies to all the percentages, I am not able to understand how did u calculate that.
    Kindly explain us in details please.
     
    sanjay_sansanwal, Aug 5, 2012
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  2. shabbir

    shabbir Administrator Staff Member

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    Stop loss should be something that you are comfortable loosing and that too you target 2, 3 or 4 times your loss as target and if stop loss is something you are not comfortable loosing, it is very risky trade and I avoid it.

    Fibonacci is explained in my ebook is for understanding the TV toons where people predict that stock would go down by 33% or 50% and things like those but I don't use Fibo analysis on for my trading.

    Still understanding Fibo is important and 23.6% of 5345 is not how you do the maths.

    The start of Fibo is 0 and 5345 is 100% and so the range is 0 to 100 and 23% in that range is what becomes that number.

    I hope it helps understanding.
     
    shabbir, Aug 6, 2012
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