Let’s break down Fibonacci trading secrets step by step

Fibonacci is a mathematical sequence (0, 1, 1, 2, 3, 5, 8, 13, 21…) discovered by Leonardo Fibonacci. In trading, we use Fibonacci ratios derived from this sequence — mainly:

• 23.6%
   
• 38.2%
   
• 50% (not a Fibonacci ratio, but widely used)
   
• 61.8% (“Golden Ratio”)
   
• 78.6%
   

These levels help traders predict possible support, resistance, entry, and exit points.

The Core Tool ✅ How it works: Used to identify pullback levels during a trend.

Idea: Price never moves in a straight line. After trending, it retraces to Fibonacci levels before resuming the move.

📊 Example: Suppose a stock moves from ₹100 → ₹200.

Draw Fibonacci retracement from swing low (₹100) to swing high (₹200).

The retracement levels will be:

Fibonacci Level Price 23.6% -₹176.4,  38.2% - ₹161.8,  50% -₹150.0, 

61.8% -₹138.2,  78.6% - ₹121.4

💡 Trading Secret: In an uptrend, the 38.2% – 61.8% zone is known as the "golden pocket" — most reversals happen here. Traders buy around these levels with stop-loss below 61.8%.

 Once a retracement is complete and the trend resumes, Fibonacci extension levels help find profit targets. Common extension levels:

• 1.272 
• 1.618 (“Golden Extension”) 
• 2.618
   

📊 Example (from ₹100 to ₹200, then retrace to ₹150):

• Next targets can be: 
  • 1.272: ₹200 + (1.272 × ₹100) = ₹227.2 
  • 1.618: ₹200 + (1.618 × ₹100) = ₹261.8
     

💡 Trading Secret: Professional swing traders often book partial profit at 1.272 and full profit around 1.618.

 Hidden Support / Resistance Secret used by institutions: If multiple Fibonacci levels (retracements or extensions from different swings) converge around the same price zone, it becomes a powerful support/resistance area.

📌 These zones are called Fibonacci Clusters — they often trigger big reversals.

Fibonacci alone isn’t magic. Combine it with:

Candlestick signals (hammer, engulfing, etc.) near Fibonacci levels

Volume confirmation

Trendlines or Moving Averages for confluence

💡 Example Setup:

Price rallies from ₹100 → ₹200

Retraces to 61.8% (~₹138)

Forms a bullish engulfing candle

Volume spikes

➡️ This is a high-probability entry. Target 1.272 or 1.618.

 Use on 30-min or 1-hour chart for intraday levels

Combine with simple wave counts like 3,5,9,13,17,21

Trade only in the direction of higher time-frame trend

Best results occur in trending markets, not choppy ones

🔥 Secret #1 – Golden Pocket: The zone between 61.8% and 65% is where institutions accumulate positions.

🔥 Secret #2 – Fib + Trendline Breakout: If a pullback to 61.8% coincides with a breakout from a trendline, the move is often explosive.

🔥 Secret #3 – Fib Time Zones: Some traders use Fibonacci numbers for timing (e.g., 3,5, 8, 13, 21;34,55,89,144 candles) to predict reversal days.

Identify the main trend (up or down).

Draw Fibonacci retracement from swing low to high (or vice versa).

Wait for price to retrace 38.2%–61.8%.

Confirm the close value above 38.2% with candlestick + volume.

Enter trade with SL beyond 61.8%.

Book profits at 1.272 / 1.618 extensions.