Fibonacci Retracement Strategy for Intraday Trading

Hello everyone, welcome to today's session in Quantsapp. In today's lesson we will be talking about Fibonacci retracement, how you can trade with it intraday. But before starting the video, if you're new here, you can go to the description; there is a link below with the help of which you can download and install the Quantsapp web application. After successful registration you will get some free tools that will help you out in your trading. In the application we have a Video Library, so in this Video Library you will get some videos, okay, and these videos are available in multiple languages, based on various strategies, so you can watch them in your meantime. At any point of time, if you guys are having any kind of doubts or queries, you can contact us from here; in Support you will get our contact number as well as an email ID, so you can contact us and we will be there to sort your queries out. Let's start today's lesson. In today's lesson we will be talking about Fibonacci numbers, the Fibonacci retracement level, and how you can trade with it. Now, whenever we are talking about Fibonacci numbers, these are the natural numbers, not naturals, but you can say random numbers that exist in nature, for example in the petals of a flower, okay, in branches of trees, in seeds of fruits and plants, okay. And when we are using it, so we use it in mathematical theory, we use these numbers in mathematical theory, in financial markets, okay, in algorithms,

so that is when we are also using these numbers, and the application of these numbers in technical analysis, or when we are trading with it, okay. So now, when I'm talking about Fibonacci retracement or Fibonacci numbers, okay, so first of all, let me write the topic here. So we are talking about Fibonacci today, okay. Now, Fibonacci, so generally when we talk about these numbers, these numbers start from zero and one, okay, so 0 and 1, and then we will keep adding these numbers, okay. So for example, if I'll add zero and one, I'll get one; then again I have to add one, one, so I'll get two, okay. So I'm just adding the number to the preceding number, right. So 2 + 1, then we will get three; 3 + 2, we will get five; 5 + 3, we will get 8, okay; then 8 + 5, we will get 13, okay; then 13 and 8, we will get 21, okay. So similarly, this will go on, okay. So these are all, these are all my Fibonacci numbers, okay. So these are the Fibonacci numbers that exist in nature, right. Okay, now, out of these Fibonacci numbers, okay, we calculate the golden ratio, and from that golden ratio our markets usually retrace back, okay. Now, if you will divide the number by the preceding number,

at that time you will get the golden ratio, right, and from that golden ratio we will be drawing certain levels of Fibonacci, okay. Now let's see what these Fibonacci retracement levels are, okay. So for that I am going into the Quantsapp application, and from the Analyze section I will open the charts, okay. Now, what will we do? We will analyze the retracement levels in the 15-minute time frame, and then we will take our trade. We will take our entry in 15 minutes, or you can take the entry in 3 minutes, or if you are a scalper you can trade in 1 minute as well, right. But for analyzing the market I will go with the 15 minute, okay. So I am applying the 15-minute time frame here, okay. I will just quickly remove all of this, removing indicators. So as I have removed all other indicators, now I will add Fibonacci retracement here, okay. So for Fibonacci retracement I will go here; I will choose the Fibonacci retracement. Now I want to know a movement, a good movement in Nifty, okay, and I want to know from where my market will retrace back, or it will move in a certain direction, right. So for that I can see there was a good movement in Nifty, okay. So the date was, I'll tell you the date as well, so just a second, first of all let me remove this one, okay. So for that level I can see there was a very good movement that started in Nifty from, you can say, 19th November at 2 p.m., and then

with this movement my market went down, and this movement actually ended at this point of time, okay. So the candle was approximately 9:30, okay, on 21 November, 9:30, and the market was in a sideways direction after that for a certain time, right. Now, if this was a good movement, I will apply my Fibonacci retracement from this point to this point, okay. So for that I'm again selecting this Fibonacci retracement, okay, and I will just apply it here. So from the upper point, okay, from the upper point, okay, so just a second, like this. So from the upper point, from where my movement actually started, so you can see, from this point of time, from this candle, the movement actually started. This was the red candle, okay, from where the downward movement started. And then, for the lower direction, I know my movement existed till this point, okay. So I will just keep my level till here, okay. So I'm keeping my level of Fibonacci retracement till here, okay. Now, these are the certain levels that I have drawn, okay, and these are customized, so I will also tell you the settings as well. So in these settings, in the settings, you can see I have only applied the 0.382 golden ratio, then 0.618. Now here you will get one in your Fibonacci, you can say, tool, okay, but you have to remove that one, and you have to apply 0.66 here, okay. So that is

a customized number, okay, that I have created myself. Then 0.5 and 1.618; you have to disable all other golden ratios from here, right. So you have to just enable these five numbers. Right, now, how to analyze this Fibonacci retracement? So now, as I have analyzed it in the 15 minute, now for the entry I will go to the 5-minute time frame, okay, to the 5-minute time frame, okay, okay. Now, what will happen here? What is happening here? So let's see. So you can see there was a good downward move in Nifty, okay. So when this movement came from this point to this point, okay, at that point of time I applied this Fibonacci retracement, okay. Now I want to know whether this trend will retrace back from this level, or this level, or this level, okay. So that is my aim, okay. So for that, what will I do? I have drawn this level, so you can see from 0.66 to 0.618, that is my, you can say, a range, okay. So I will always analyze this range, okay. The short-term movements can retrace back from 0.5 as well; they can retrace back from 0.3 as well, but the main important, you can say, the zone, that is

from 0.66 to 0.618, okay. So that is the main aim. So whenever our market reaches that point, then we will be going for a trade; we will be making our entry, okay. In which direction? Let's see. Now you can see my market came down, okay, then it went back again from the 0.5 level. So if you are a scalper, you could have taken a trade from this level, from 0.5, because this is a very good level. So the market, if it will retrace itself back, okay, to 0.5, at that time you can do scalping with the 1-minute time frame, okay. But this is just for the scalpers, okay. For the day traders, who usually take their trades for 2 or 3 hours, they have to wait for the market to go to this level, to 0.66 to 0.618, okay. Then you can see, after that my market went to this level, that is my block, or that is my zone, okay, and after that you can see there was a good downward movement for at least half an hour, okay. So I would be buying a put option at that point of time, right, a put option, ATM strike price, okay, at this point of time. Then you can see again my market retraced back, and when this zone, that was, you can say, that was my zone, or you can also consider it as a supply zone, because my market is moving in the upward direction, so you can see when

this zone was successfully broken out, okay, at that point of time I have to change my interpretation; I have to change my direction. Because right now I was analyzing from where the market will retrace itself back, but then, when this zone was broken, at that time I know the market has now changed its character. So now, at this point of time, at this point of time, I will trade in the upward direction, so then I would be going with the call ATM option, okay, if this zone is broken out successfully, right. So that is the theory behind it, okay. So you have to consider this zone if you are a day trader, okay. You can go for scalping if your market will retrace back from 0.5 as well, okay. Now, many traders must be thinking, what is this level, that is 0.382, okay? So if the market is at 0.382, the market came here, it went back again to 0.382. Now this level will give you a retracement back only when there will be a good red candle, for example, you can say, a Marubozu candle, okay, a bearish engulfing candle. So if you notice any candle at 0.382, for example my market came back to this level, retraced back, then there is a good engulfing candle, a red, okay, bearish engulfing

candle, at that point of time you can make your entry in the bearish direction from 0.382, right. But if there is not any kind of this candle, which is a very strong candle, at that point of time my market will retrace back to 0.5. So that is the condition for scalpers, so scalpers can be active at this point of time, 0.5, but for the day traders who want to hold their trades for a little more duration, they have to wait for the market to come to this level, right. I hope the concept is clear. Let's see this example, or again an application, on some other stock. So for another stock, I'll be applying, I'll be applying some stock here. So for the stock we can choose, let's choose randomly, but we can see, you can say, Idea was performing well tomorrow, okay. So there was a very good increase in price in Idea, so let's see how Idea is doing right now. So we will be applying Idea, the chart of Idea, here, okay. Now, in the chart of Idea, you can see the movement started from here, okay. Currently the market went up to here and then there is a downtrend, okay, a significant downtrend in 5 minute, but we will be analyzing, analyzing this in the 15 minute first. Now you can see my market gave me a very good downward movement, okay. So there was a very good downward movement, so what can I do? I will just again choose the Fibonacci

retracement. I will apply it here, so I have to apply it here. So the market, the movement started from this point of time, from this red candle, okay, and the movement existed till this point of time, right, the movement existed. Okay, sorry, I have drawn it in the wrong direction. So the movement started from this point of time, just a second, so the movement started from this point of time, from this red candle, okay. So I'll place my higher mark on the high of that candle. Then you can see the movement lasted till this candle, so I will apply my lower band to this point, right, lower band to this point. Now you can see here, at this point of time, when my market is live right now, okay, so it gave me a movement, okay, here, then again my market went back to this level. Now you can see, at this point of time I'm not getting any candle, a strong candle, that is a Marubozu, or that is an engulfing candle, or a hanging man; I'm not getting it here. So this is a signal that my market will not retrace back, okay. So then you can see my market went back to the 0.5 level, okay. So it went back to approximately the 0.5 level, and from the 0.5 level, when it rose here, then I can see my market gave me a rejection from 0.5, and currently it is

going in the downward direction, right. So this can be a move for the scalpers, where they can gain 15 to 20 points, okay, in a particular stock or index, right. Now, if I am a day trader, I will wait for my market to reach this level, to 0.66, okay, to 0.618, and when the market reaches that zone, okay, I will wait for the market to revert back. But at any point of time, if there will be a green candle that will be closing above this range, at that time, at that point of time, I will change my interpretation, I will change my analysis, and then, because the market has changed character, I will be going for the call option in this particular stock, okay. But if my market will be stuck here, okay, at that point of time I will go for the bearish direction, because from this range my market usually gives me a reward back. So this is how you have to trade with the Fibonacci retracement. I have shown you some levels; I have shown you some settings with which you can apply it efficiently, and it will work flawlessly for you if you are an intraday trader, okay. So I hope the concept is clear. I hope you got to know something good today about Fibonacci retracement, what it actually is, how it works in the market, okay, and how you have to trade with it. So thank you for watching this video, okay. You can like this video. Make sure to share

it with your friends as well. You can share your views in the comment section. Make sure to subscribe to the channel as well. Thank you so much, guys. This is your trainer, Ankit Singh Rawat. Have a good day.