You use Fibonacci on the Arithmetic or Logarithmic scale?

[MrSpasybo]

We are currently seeing a correction in BTC price right after hitting $49K and many traders are trying to explain this. Some of them use Fibonacci Retracement, but they are also divided into 2 sides:

+ The first side uses the Arithmetic scale for price, they conclude that the price reversed from increasing to decreasing when it touched Fibo 0.618. This can be observed in history. In the Harmonic Trading method, Scott Carney also uses the Arithmetic scale.

+ The second side uses the Logarithmic scale for the price, they conclude that the price reversed from increasing to decreasing when it touched Fibo 0.786. This can also be observed in history.

Maybe this is just a coincidence, but both of these approaches can explain and predict BTC's reversal. What fun!

I believe in the Logarithmic scale more because I think traders come to the market focusing only on profits in % of capital, instead asset price in terms of $.

However, I still think that the existence of a group of traders using the Arithmetic scale also creates price volatility when reaching Fibo levels on that scale.

So the reversal of price chart can be created from trading psychology of both Arithmetic & Logarithmic sides.

You usually use Fibonacci on the Arithmetic or Logarithmic scale? Is there any special basis or reason for that choice?

[jeraldskie11]

Both of them are working base on my back test but most of the time when the price hit 0.786 after a break of structure the price won't bounce drastically and break the weak high/low. Usually it only bounces a little and then it will go for reversal. I see 0.618 level as a healthy price action because these area is considered as a golden zone, and when the price reach this level usually the price creates new high/low. But now, I use only Fib as confluence to my strategy, I didn't use it as my main because I found out that the win rate is so low if you solely use this strategy.

[MrSpasybo]

Both of them are working base on my back test but most of the time when the price hit 0.786 after a break of structure the price won't bounce drastically and break the weak high/low. Usually it only bounces a little and then it will go for reversal. I see 0.618 level as a healthy price action because these area is considered as a golden zone, and when the price reach this level usually the price creates new high/low. But now, I use only Fib as confluence to my strategy, I didn't use it as my main because I found out that the win rate is so low if you solely use this strategy.

Yeah, Fibo points to important price levels, meaning we have 0.236, 0.382, 0.5, 0.618, 0.786 all as potential reversal zones. Other methods (RSI, MACD, Ichimoku, Price action...) should be used to determine important Fibo values.
Do you usually use the Arithmetic or Logarithmic scale?

[Yamane_Keto]

Although the logarithmic scale gives you a better handle on the data and finding the true average value, in this case we focus on the recent events as they have a greater impact on the price than the average point. I agree with those who say that the price has touched Fibonacci 0.618, which is considered the peak for the next four months.
Determining the peak is not important, as the price will exceed it before the end of Q2, but where we will go at the bottom is the thing to track, as some claim that the bottom will be 32k, and some have gone to 28k.

[MrSpasybo]

Although the logarithmic scale gives you a better handle on the data and finding the true average value ~

I think the Log scale does not tell us the average value, it only differs from the Ari scale in the parameters used: instead of Price, Log10(Price) will be used. This difference will cause some changes in the Fibo levels. The habit of using Fibo at which scale will depend on the habit of viewing price charts at which scale. I always view price charts on the Log scale, so I also prioritize using Fibo on the Log scale.

Market sentiment is often more extreme than necessary: many people used to expect BTC to drop to $40K to buy more, but now when what they expected has happened, they are afraid to buy, even sell their BTC holdings. For now, I still maintain my expectation that BTC price will not fall too far below $30K before the new ATH 🚀🚀🚀

[Trongduy]

Both of them are working base on my back test but most of the time when the price hit 0.786 after a break of structure the price won't bounce drastically and break the weak high/low. Usually it only bounces a little and then it will go for reversal. I see 0.618 level as a healthy price action because these area is considered as a golden zone, and when the price reach this level usually the price creates new high/low. But now, I use only Fib as confluence to my strategy, I didn't use it as my main because I found out that the win rate is so low if you solely use this strategy.

Agree, I also often use both scales, whichever Fibo zone coincides will be considered to play an important role in price fluctuations. I think the market is divided into two parts: those who use log scales and those who use regular scales. When both parts are interested in a price zone, that price zone will become important for future price fluctuations.

Both uses exist, which proves they both have their own value for traders.

[MrSpasybo]

Agree, I also often use both scales, whichever Fibo zone coincides will be considered to play an important role in price fluctuations. I think the market is divided into two parts: those who use log scales and those who use regular scales. When both parts are interested in a price zone, that price zone will become important for future price fluctuations.

Both uses exist, which proves they both have their own value for traders.

Yeah, I also agree with your statement. In the market there are many people using Logs and many people using Ari scales, and they are all able to make profits in trading, proving that their approach is reasonable and valuable for generating trades. success. The combination of the two could suggest an important price zone as both sides expect a strong price movement at that price zone.

Personally, I prefer to use Log scale because it seems more logical in the market model I am monitoring. However, that doesn't stop me from respecting traders who are using Ari scale.