Thread by @nsinghal211

Fibonacci Retracement – The Most Misused but Powerful Tool in Trading 🧵

You’ve seen the golden levels:
📍 0.618
📍 0.5
📍 0.382

But do you really know how Smart Money uses Fibonacci?

In this thread:

✅ Fibonacci basics
✅ Secret levels
✅ Entry + SL + Target rules
✅ Swing & Intraday trades
✅ With Order Blocks, OBs & VWAP

👇

#niftycrash

1) What is Fibonacci Retracement?

Fibonacci is based on natural ratios (like 0.618) found everywhere — plants, galaxies, and the markets.

In trading:

We use it to find potential pullback zones within a move.
📌 Key Levels:

0.236 → Weak pullback

0.382 → First bounce

0.5 → Neutral zone (not a true Fib level, but used)

0.618 → Golden retracement

0.786 → Deep retracement (Smart Money favorite)

2) How to Plot Fibonacci (Correctly)

❌ Most plot it from random highs/lows.

✅ Here’s the correct way:

📍 Identify an impulsive move (clear trend leg)
📍 Plot Fib from swing low to swing high (in uptrend)
📍 Or swing high to swing low (in downtrend)

💥 Plot from body-to-body for Smart Money accuracy (not wick)

3) How Smart Money Uses Fibonacci

Institutions don’t enter at 0.236 or 0.382.
They wait for:

✅ 0.618–0.786 retracement
✅ OB or FVG near that zone
✅ Liquidity sweep below structure
✅ RSI/Volume divergence
✅ Engulfing or trap candle

📍 Then they enter → ride it to new highs/lows.

4) Entry Strategy 1: The Golden Entry

📌 Price pulls back to 0.618–0.786 Fib zone
📌 OB or FVG aligns with it
📌 Forms bullish engulfing or rejection wick

🎯 Entry: After confirmation candle

❌ SL: Below 0.786 or trap wick

🎯 Target: 0.0 Fib (swing high) → then Fib extension 1.272, 1.618

💥 Works beautifully for swing trades

5) Entry Strategy 2: Fib + OB Combo (Intraday)

✅ Mark 15m impulsive leg
✅ Plot Fib on that leg
✅ Drop to 5m or 3m
✅ Look for OB inside 0.618–0.786
✅ Wait for rejection wick or CHoCH

🎯 Buy CE or long futures

❌ SL: Below OB

🎯 Target: Back to swing high → then extension

💡 Great for BankNifty intraday plays

6) Entry Strategy 3: Fib + VWAP + Volume

📌 Price retraces to 0.618
📌 VWAP support nearby
📌 Volume spike on green candle
📌 RSI crosses 40–50 zone

🎯 Buy CE option

❌ SL: Below VWAP

🎯 Target: Fib 0.0 + 1.272

⚠️ Avoid entry if volume is weak or VWAP is broken

7) Targets Using Fibonacci Extensions

Once price moves past previous high/low (0.0 level), use:

📍 1.272 → conservative target

📍 1.618 → golden target

📍 2.0 → max extension (rare but explosive)

💡 Use these levels for exit planning in options or futures.

8) Example – BankNifty 15m Chart

Impulsive rally: 49,500 to 50,100

Pullback to 49,650 (Fib 0.618)

OB + bullish engulfing + VWAP hold

Buy 49,800 CE @ ₹120

Target hit at 50,100 (0.0) → then 1.272 at 50,300 ✅

RR: 1:3+ in < 1.5 hours 🔥

9) Pro Tips for Using Fibonacci

✅ Align Fib levels with:

Order Blocks

Fair Value Gaps

VWAP

CPR

RSI Divergence

✅ Don’t enter blindly at Fib zones

→ Wait for confirmation

✅ Plot Fib on HTF (15m, 1H) and enter on LTF (5m, 3m)

10) Secret Level Most Traders Ignore: 0.705

📌 Hidden institutional level between 0.618 & 0.786

📌 Price often reacts better at 0.705 than 0.618

📌 Smart Money enters here when OB sits exactly at 70.5%

🎯 Try it in your charts — sniper entries await 😎

Join us on telegram channel for live trading in FREE

t.me/nehasinghaltra…