..When people talk of curve fitting - it's usually a negative thing - and it is usually because people are trying to get a specific stock, index or what ever fit their formula...almost to try to make stock or whatever move according to the formula they are using.
Thank you for asking this question!
As a trend ages the patterns will tend to widen. I draw the forks to
the 0.618 Fibonacci Fan at first and then change it to the .786 later.
Also I'm not always correct and when it becomes obvious that the fork
should have been positioned differently I yield. The Fibonacci Fans
are a very good way to double check the fork, but sometimes you have to
move it around until it appears to track the pattern. Generally I start
with 0% at the first peak or valley, but the market does not always
follow perfect math formulas so I use it as a guide not an absolute.
The longer the trend trend, the easier it becomes to find the right
placement so refinement is allowed.
The forks are fractal in nature and show the trends in various time
frames very well. By fractal I mean that smaller forks can be drawn
within larger forks. But even if a fork needs to be moved later, chances
are it will serve you for a while. Drawing forks is not as simple as it
looks. It takes practice, and is open to debate which I would like to
see more of. Like I said I'm not always correct and often miss seeing
the best positions.
I present this blog for two reasons:
1. It's a great way to go back and learn from my mistakes. Even if you
don't blog, keeping a diary of your trades is very beneficial.
2. I want to help others keep their forks
aligned. Here again if more people were to share their fork placement,
the collective knowledge would benefit everyone even better.
When placing forks I also look at the Volume Profile for guidance. If
an anticipated path intersects with both the outer channel of the fork and
a low volume area, then it has an even better chance of being correct.
I also use volume, candle sticks and internals to confirm a break out.
The Ichimoku Kumo can also be a supportive tool when looking for areas
of support and resistance.