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Using Fibonacci Extensions to set profit targets?
I have never seen a backtest showing that prices tended to be attracted by / to revert around Fibonacci levels. The fact that many people use them doesn't mean that they can be turned into a profitable system... I have on the other hand seen many backtests showing that they don't do anything, such as the one described in this article: At least in this sample of market data, using this particularly specification for swings, we find no evidence that Fibonacci ratios are significant in the market.   Perhaps I have missed something significant, or perhaps I am merely completely wrong in my analysis, but one thing should be clear—the burden of proof should lie on the people offering arcane and complex methodologies, when simpler methods work just as well or better in the marketplace. If Fibonacci ratios are the key to the markets, where are the quantitative tests? Where’s the proof?