Fibonacci Analysis
Constance Brown, CMT, distills Fibonacci analysis to two hundred or so comprehensive, clearly written, eminently practical pages. Brown knows exactly what a professional trying to come up to speed on a new trading tool needs and she provides it, covering what Fibonacci analysis is, how it works, where it comes from, pitfalls and dangers, and, of course, how to use it. Basic trading strategies are touched upon in virtually every chapter. Fibonacci analysis is one of the most popu…
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Fibonacci seems to be an area of technical analysis that is very poorly covered in the literature. There are several books but many of them are by writers of newsletters (and the books often spend page after page on historical irrelevant detail). This doesn’t automatically make the books bad, but it is likely that the author will hold back certain information. This book is not for beginners. I would buy Robert Miner’s book to get the received wisdom on Fibonacci retracements and extentions. Then I would experiment trading on those ideas for a couple of years. Anything above this level isn’t in the public domain and you have to be prepared to spend a lot of time doing research. If you want to learn more you can consider buying this book or another specialised book (Greenblatt or Boroden). But be aware: The further you read this book the more opaque it becomes. I think you also need to subscribe to the author’s newsletter. So this author does hold back information, but in the earlier chapter the writing is fairly straightforward and some testable ideas are presented. Personally I have decided not to go down this route. I do believe there is value in basic Fibonacci ratios, but there is too much mysticism in the advanced literature for my comfort. Maybe I’m missing something, but I take the risk. I’ve still given this book 3 stars because I suppose it is cutting edge and if you are interested in the area it is worth getting other people’s ideas for forward your own thinking. I have written several short reviews on trading books. The best way is to compare the score on the books I’ve read. Many reviews on amazon. com are just glorious 5 star reviews. I use all five categories; sorry but everything isn’t “great”. Books rated 5 are very good. Books rated 4 are good solid books well worth reading. Books rated 3 can be bought by some people who read a lot or have very specific needs. Books rated 1 or 2 I would not recommend buying or reading. Naturally all in my humble opinion.
1Constance Brown is a very intelligent person. I said that first because this is not the type of investing book that deals in general market tactics and strategies that most people write and can write. If you read this book you might find yourself(as I did) going back and reviewing things before you get the hang of it. Fibonacci systems are not easily understood if they are to be implemented correctly. This book covers all you’ll need to understand and implement Fibonacci systems in your technical analysis, except for the software obviously. Like she says in the book, don’t feel discouraged if you don’t get it right away. Keep at it and keep researching and tempering your skill. I wish Mrs. Brown would write a series on Technical Analysis(she mentions other topics that she would like to write about in the book). She has written other books but I’d like to see them republished or some written anew. All-in-all a great book. Not for beginners. Definitely rewarding. Pluses: A first(or near it) of it’s kind. Deep subject reviewed and explained. Author has authority and knowledge on subject. Minuses: Book might be out of reach for some leading to disappointment. Definitely requires study to fully understand.
2I have read this book twice and started using the confluence zones. Now the book is used like a daily reference manual. Keep in mind that the other reviews you see above are correct; knowledge of technical analysis is helpful in understanding this information. I have been investing and trading for several years and I have also accumulated 100 books on the subject. None of these books ever compelled me to write to the author and thank them for writing their book; that is until this one. Constance has a gift for teaching. Being brilliant helps too! This book is required reading for the serious trader. I am amazed at what happens in the confluence zones!! I am getting better and better at drawing the correct Fib Levels and my zones are becoming meaningful and respected. This makes me freak out a little because these are levels I would never see otherwise; they have no meaning until you find them!! (if that makes any sense at all)I know several traders who think they are using Fibonacci Levels. Now I recognize that they are using Fibonacci all wrong. I was too; before I read this book. My advice; get the book, read it, read it, read it; then practice like you have never practiced before. Tools are only as good as the hand they find themselves in; be committed and this will amaze you too.
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