1/What is Fibonnaci (Fibo) retracement?: •Fibo retracement levels help us to identify potential reversal area or identifying potential entry point after a pullback. •It represents various levels of significance within a swing high and low.

2/How to plot the Fibo? •Spot the recent swing high & swing low (usually a peak & a low) on a chart. •Plot the Fibo on these points. •You'll get 5 key levels of support & resistance (S/R) in between the peak & low. •Key Fibonacci ratios: 23.6%, 38.2%, 50%, 61.8%, & 100%.

3/ Importance of retracement levels: • The retracement level forecast can determine the level at which retracement is likely to occur. • These retracement levels offer traders a favourable entry to open new trades in the direction of the trend.

4/ When to apply Fibo: •Fibonacci analysis can be applied when there is a noticeable up-move or down-move in prices. •Applying it in range bound markets would turn out to be a futile exercise.

5/ Best TF to use for Fibo: •Though it can be used on any time frame, for better results apply it on a higher TF, anything beyond 30mins. •Higher the TF you choose, higher would be the holding period for the trade. •Best TF to choose: Know your type & trading style.

6/How I use Fibo Retracements?: • I look at larger TF's only for positional trading/ investing. • While choosing a stock to get an entry, then I will focus only on strong fundamental companies. • Can be used to make investment decisions in sectoral MFs or Index BeES.

7/ Examples for buying: Stock •Lets say, you always wanted to purchase few qty of #DMART, but were unable to do so due to a rapid run-up in the stock. •So wait for the stock to retrace for a favourable entry. •P.S.: Like any indicator, use this as a confirmation tool.

8/ Examples for buying: Index • First use the Fibo tool and plot it on the swing low and pull it up till the swing high, thereafter the FIBO ratios will get plotted automatically.

9/ Example to find resistance/ enter fresh sell trades in Index: • Use the Fibo tool and plot it on the swing high and pull it up till the swing low, thereafter the FIBO ratios will get plotted automatically.

10/ Relevance of the key ratios: • 23.6% retracement is rather shallow & is appropriate for flag breakouts or brief pullbacks. • 61.8% retracement level, aka the golden ratio is relatively deeper, but crucial. • Retracements between 38.2% to 50%, is regarded as moderate.

11/How pro traders use Fibo to initiate investing: • Few months ago, one of the super trader @bhatiamanu Sir, had tweeted that he would look to start investing near 13k levels on Nifty. • This number was arrived from Fibo retracement (refer chart 2)

12/ How to identify weak sectors? • Unlike Nifty, which didn't even retrace by 38.2%,there are sectors which have retraced > 38.2% •In other words the correction was relatively deeper than Nifty. • Those sectors are essentially underperformers: i) NIFTYIT ii) NIFTYPHARMA

13/Conclusion: • A trader can consider taking entry basis Fibonacci retracement only when other conditions are also fulfilled: i)Formation of a reversal pattern ii)The pattern formation & the retracement level should form near the long term S/R. iii)Always have a Stop loss.

14/Few key points to remember: • This is just the tip of the iceberg when it comes to Fibo retracement. • I encourage you to do some back testing of your own on different TF's and check the results before taking entries. • Also remember nothing works in isolation.

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