How we came up with the True Fibonacci, and what is the need for that in real-time trading?
First, we understood that the traditional way of using Fibonacci by many traders, including the so-called experts, was wrong!!!
You might wonder why is that?
Here is the answer
Most of the traders simply draw a FIBO retracement between a HIGH & LOW or between a previous day HIGH & LOW or between weekly H&L or some draw it for the month. Nothing more than that.
This approach is an insane way of using Fibonacci when you understand the basic concept of how this number system works.
It is the main reason we started our Research on Fibonacci first. Finally, we made a breakthrough on how to use it properly and effectively after going through 100000+ backtest (Thanks to the Metatrader 5 multi-thread technology, which allowed us to backtest back and forth as smooth as possible. This tool wouldn’t be possible without such a kind of testing)
After such a fat backtests, we came to a simple and powerful conclusion.
We need to draw Fibonacci between a real trend and not simply some high and low points between some time frame or trend we just guess out.
Drawing a Fibonacci between a real trend occurred will give away a more accurate forecast than any traditional way of using the Fibonacci
Then How to find a real TREND?
Billion $ question for sure? But the trend we are talking about is the past trend which occurred and not the upcoming one, which is hard to derive. So using the present-day technology and Machine learning Algorithms which our team is familiar with, we started plotting real trends that occurred in each instrument. We analyzed by plotting the Fibonacci between those trend points and that’s when we uncovered the MAGIC of our forecast model.
So when you draw Fibonacci between a Real trend or a true trend, that is the True Fibonacci.
That’s the birth of the real way of using a great old MATH in the trading.