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Fibonacci Retracement Calculator – Working

Fibonacci calculations can be used for any stock and with any time frame. Use the retracement levels for the timeframe you would like to trade. It is a good idea to keep an eye on multiple retracement levels in various timeframes.

For EW experts, Fibonacci calculator is a simple and useful tool that can help you to calculate Fibonacci extension and retracement levels for the market price.

In any market (bull or bear), the corrections usually end near golden ratio or one of the other  Fib retracement levels. The extensions are used to find next impulse targets.

Fibonacci Levels Explained:

Fibonacci Numbers:

The Fibonacci Sequence is the series of numbers:
0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, …
The next number is found by adding up the two numbers before it.

Here is a longer list:
0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987, 1597, 2584, 4181, 6765, 10946, 17711, 28657, 46368, 75025, 121393, 196418, 317811, …

Fibonacci Golden Ratio:

This is the most interesting part of Fibonacci numbers, especially for traders. If you take any two successive Fibonacci Numbers, their ratio is very close to the Golden Ratio “φ” which is approximately 1.618034

The fun part is that the reverse of 1.618034 is equal to 0.618034 (Don’t believe it. Try it yourself)

The bigger the pair of Fibonacci Numbers, the closer the approximation.

How does a Trader use Golden Ratio / Fibonacci numbers?

Fibonacci calculator can help set two set of numbers:

1) Support level – This can be calculated by the Fibonacci retracement calculator. This the level at which market finds more demand. It can also be identified on a technical basis by seeing where the stock has bottomed out in the past.

2) Resistance level – This can be calculated by the Fibonacci extension calculator. These are the levels at which market finds more supply.

If the Fibonacci calculator is used with Elliot Waves, it can give remarkable results to traders. A trader could use these ratios to find high probability trades with very small stop loss.

Alternatively, you may use these ratios to find Elliott Waves extensions and to book profit near those levels.

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2 COMMENTS

  1. Hello,
    This is Vaibhav Vaidya from Mumbai. I’m an Insurance professional and having been working in the middle management level in one of the leading private life insurance companies for past 11 years and with a total work experience of 22+ years. I’m keen to learn F&O and wish to be a proficient user of various tools and techniques.

    Do you conduct a coaching to meet my requirement? If yes, can you please share the details such as duration, fees, venue etc. If not, can you guide me to the ones who conduct it.

    I would also like to know about your Premium Membership – Under the subscription, do you provide recommendations or more in-depth data for the users to take their own decision? IF it is former, can yuu not share your past performance (especially in last 3 months when markets were quite volatile) and also some sample recommendations?

    • Hello Vaibhav,
      Please share your contact details and your query at Care@NiftyTrader.in So, that we can provide you a detailed response to your queries.
      We can provide you with video tutorials from next month as they are in the development phase and the premium feature is basically a detailed analysis of stocks. So, as of now, we are not providing any direct recommendation but yes we are providing in-depth data for taking a decision in the stock purchase.
      We can also provide you 14 Day trial of the premium version. For getting access to the trial version. Please write to us at Care@NiftyTrader.in

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