Log Scale Fib Retracements are Worthless (to me)

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[Wuuzzaaful]

Some time ago I started small statistical study about the log fib function on TV. Results: Bots seem to rely on linear fib because most of them trade short term (<12h). For longer term (>=1D) I've had good results with the log fib option. So I started to use both options depending on the TF :).

[arashmokhtari]

Well in neowave theory, you should use log-scale fibo levels for counting complex waves... Because these waves are long and in long term, log-scale is much better

But for the price action point of view, i think both linear and log-scale fibo levels could give you some information and you should check for each Chart which one works better

Another thing is when you put your chart on logarithmic scaling, every trend line and channels and fork .... also changes a bit

If i want to make a short term trade i use linear scaling but for long term trades log scaling is much better

[claudews]

Obviously not obvious to explain. But +1 for the attempt.
My choice... chart in log scale, I want to see variations in terms of percent. As you said.

Fibonacci: my current understanding:
- Fibonacci in log mode: is on % variation. We get the same % variation between 0-50 and 50-100. (but not on price)
- Fib in linear mode: is on the price value. With a low at 30$ and a high at 60$, we get the Fib-50 at 45$. (but not on the % variation)

I use Fib in log scale. Very often I notice that a retracement will reverse back in the trend if it does not cross Fib-50%.
But I realize now that it does not really matter which one I use... What does, is to know what to expect in whatever mode I use (which comes with repeated use)
Furthermore, I find that both modes, very often, give valid clues about support-resistance levels, just not the same ones.

cheers.

[chatomauricio]

Makes sense and finally found someone with the answer. I was matching log scale charts with fibs based on log scale. I did reasonable ok, but I'm doing better using a normal fib and couldn't understand why. I appreciate you for sharing this! Thanks so much FiboSwanny!

[MeetPrinceOla]

very well understandable, thanks for sharing this

[ultrapurple]

I have pondered this question for a while and especially after I watched this video a week or so ago because it is vital to my charting. I decided to do something about it. I used Tradingview itself to answer the question. The answer, up front is to use the linear scale. This is what I did…

…I simply placed a fib retracement drawing on a blank part of a chart on Tradingview with the ‘1’ level at 100 and the ‘0’ level at 1100. From simple maths I already know that the half way point (which is the 50% retracement level) is at 600. This is where I would lose half my money (of the top level) if I bought at $100 and allowed a retracement from a $1100 top to the $600 level. It is very fiddly trying to manually get these exact levels while drawing the fib retracement drawing. You can adjust this to the exact level by double clicking on this drawing (double click on the dashed line). A pop up box should appear. Now, under ‘coordinates’ at the top of this box adjust the level to the exact points, you put the numbers in the left boxes only, the top left number in my example would be 100, the bottom left number would be 1100.

I then looked at which type of Fib retracement (linear or log) corresponded to this real life scenario and it is a clear answer. It is the linear retracement. The 50% retracement line is at 600 in my example using the linear retracement. Using the log scale retracement positions the 50% retracement level at 331.66 which is not an accurate depiction of my actual loss in real life. If I bought 1 share and suffered this 50% retracement in my example, I would have $600 (linear) not $331.66 (log).

You can all try this yourself on Tradingview and use whatever numbers you want. I would suggest using numbers that are far apart and clean multiples of each other so you can clearly distinguish between both types of retracements.

[santiagoperez]

does anybody know how to calculate the fib levels in log scale? i mean without using the tool

[srgba]

My guess is that for linear chart we use the linear fib retracement. And for log chart - log fib retr. respectively. Shouldn't mix it.

[lucasm]

which is better to use, log scale Or linear? time frame wise

[selphpics]

thanks for the content Swanny....personally I'm "old school" and have always used linear but I think that relates to the fact I originally started by hand charting as it was advised as a way to get a "feel" for price action, but i can see sense in using log especially when it comes to analysis on small cap and "penny dreadfuls"

[I_AM_CEWA]

nice content I was searching about this subject and found that liner fibs all time price reacted other than log.

[fabioellisduwe]

Why can't I check the "Fib levels based on log scale"? It appears in grey and I cannot check it.

[ruiferro]

Classic TA doesn't use log on fibonacci projections/retracements.