Fibonacci Retracement से Stock Trading कैसे करें ? | #Learn2Trade
Welcome to the 16th session of Learn2Trade I am Vivek Bajaj and I’m teaching Annapurna how to trade Hello! Hello sir! How are you doing? I’m good sir. How are you? I’m good We’re done with 15 sessions. Let’s recap what all have we learnt in these 15 sessions The base of your trading journey is built now. This is the playlist of those 15 sessions
Which is there in my channel. 14 sessions are here, we will make the 15th live tomorrow By the time we launch this video all 15 sessions will be live. What have we learnt in these 15 sessions? We have learnt the basics of trading, what is charts and how to track it, trading terminal A very important science to know. We have covered that Creating watchlist, using free charts in TradingView, identifying stocks to trade Identifying sectors to trade, what is futures market, commodities, currency trading Using moving average, who is a stock operator and how to track him using volume and delivery How to track operators through open interest, which is a derivatives concept What will we cover in the new video? Supertrend There’s an indicator known as supertrend that helps in identifying trends We have covered a lot in the 15 sessions. How’s the feedback? Very good I have started trading in small amounts and now my friends are approaching me for help I see we have a lot of comments in the video and people are showing interest in the series It’s nice. I enjoy recording such videos. There is more left to teach you. Today is the 16th I think I will be able to teach you upto 50 sessions. It’s good enough to cover A to Z of trading
You need to pay attention while I’m teaching. This is for all the viewers as well Today we will discuss a very good concept. Price breakout, price retracement I had told you about this. Yes. Breakout is when it’s breaking previous swing’s high You can participate in it as there’s a chance that it’ll show a momentum as it’s breaking its high Retracement is when it comes up again after falling down. It will come up after going down If it’s strong it will go up after falling down. Participate when it’ll come up after going down
How do we know how much will it go up and when will go up after falling down? I had taught you the demand zone and supply zone If it’s near the demand zone, it can take a support there and go up from there There’s a concept which can help us to judge the price retracement It’s called Fibonacci retracement. It’s a very interesting concept and a very natural concept How do I teach this? It’s important to know what are these fibonacci numbers These are the most natural numbers. Everything in this world works in this format I’ll show you the format. You must have heard about the fibonacci series 0,1,1,2. Why put mental effort? All we need to do is sum these numbers I’ll zoom it in and I’ll pull this down. These are all fibonacci numbers
If you sum up the numbers before the selected one, the next one is fibonacci Then accordingly the summation is the fibonacci. It’s said that the natural shapes in the world are as per fibonacci If you take your life decisions as per this pattern, the accuracy chances increases What is retracement? These are fibonacci numbers that is also known as golden ratio Let’s try to evaluate retracement. If I divide this number by the next number, I get a number If I divide this number by the number after the next, I get a number If I divide this number by the number after the 2 numbers, I get a number If I divide this number by the number after the 3 numbers, I get a number These are all important ratios. An interesting thing about it is that if I pull it down Did you understand? These are all same ratios It’s different in the start when it’s building up but all the ratios are same later 61.8%. Any journey. Suppose you’re cycling. You’ll go from 0 to 100 kms When you return after coming back, you’ll be most tired at 61.8% Then 38.2%, then 23.6%. These are important milestones
These are major milestones in between A and B You will feel unique in these milestones. It’s natural Can you pass me that ball When I throw this ball, it went up after falling. Till where did it go? Till middle. How do you know? It’s gone up to 38.2%
It came up after falling again. Till where did it go up? Till 23.6% Fibonacci has the biggest application in the nature Even gravity has fibonacci patterns. I won’t go very deep into this as this is more of Physics These numbers have big relevance in the share market and we need to study this And we need to predict when will the price retrace If I reverse these numbers. I have divided the previous number by the next number
Let’s reverse this. Let’s start a bit low This number divided by the number above This number divided by 2 numbers above it This number divided by 3 numbers above it This number divided by 4 numbers above it If I convert this to percentage Here you have 162%, 262%, 425% and 680% Even this is a pattern. Price will stop at these milestones. That’s the logic of this fibonacci series Let’s go to the chart now. I have a chart open for you. Tata Motors
We have added the 4 moving averages, 21, 55, 100 and 200, volume What’s missing in it? Open Interest. We can’t add it here. You need to track it in StockEdge It can’t be plotted in the graph. Delivery. You have to track that in StockEdge, you won’t get it here What’s missing from chart point of view? Supertrend. Supertrend is missing. Let's add it Insert the indicator here, search for supertrend. It’s an indicator by some Mr. Kivano Click on it to get the supertrend. Supertrend buy and sell. You can either buy or sell, you can’t do both
If you go to settings here, you’ll see ATR period 10 and ATR multiplier 3 We will record another video on ATR to explain its application on supertrend What do you think of this stock? Sell. Why sell? Just because supertrend is asking me to This is cheating. This is just like when we give an exam in school and the topper is sitting in front I had studied but forgot all as I copied whatever the topper wrote in his paper. This is cheating Let’s remove the supertrend. Now tell me what’s the trend. It’s in retracement It has reversed now and came closer to this moving average but the broader trend is still negative Why did you get confused? I tricked you and you got confused What does trend mean? Trend is when it creates higher highs and lower lows You might think that I give all the answers to Annapurna but it’s not like that I trick her and ask questions but I get good answers from her. It means that you’re a sincere student
Trend is negative. The trend has given a breakout but the uptrend has just begun It might not give a breakout, but it has started going up The uptrend needs to continue for more conviction. That’s what supertrend is saying This is what supertrend is saying that it’s a good thing that the trend changed But how do I believe that this trend will continue. Let the price come up more And give confirmation, then I’ll change it to green This supertrend is like a being who is trying to tell you something. Don’t cheat by seeing it
You need to form your own view. It says sell but it’s waiting to confirm the price to show buy This is your template. You’ve analaysed the stock of Tata Motors and this is your template The question arises that any stock which starts at this point and stops at this point What do we call this? Any stock that starts from this point and ends at this point Uptrend. It went in uptrend as it started from the low point and went up This is a swing movement. Each swing. It’ll go up in a certain way if it’s in upswing And go down in a certain direction if it’s in downswing.
It made a new low and a new high in the upswing The new low and high are important data points for us and if we consider the distance between the low and high The price has covered this distance, if the price has fallen down while in uptrend It will reverse at some point. Fibonacci levels decides these reverse points Let’s observe in Tata Motors. Tell me when did its swing start Since when do we see a new uptrend? From this point? Yes It did create a new trend from this point till the other point But the actual uptrend began from this point. This is an important data point for me At Rs. 164. Till when did it create its high? Where was the peak of Mt. Everest? At Rs. 350. If I draw fibonacci levels on this distance, then I will get the retracement points
How will we do that? Not by calculating from hand or laptop. It’s in-built in the software If you use TradingView, you’ll see fib retracement. There are more indicators in fibonacci Let’s not go there now, we will discuss it one by one. If I click on fib retracement Then It’ll ask me to draw. I select the low point, and the high point.
We see all the retracement points. Rs. 350 at 26.3%, Rs. 278 at 38%, Rs. 256 at 50% 50% is not a fibonacci, but people say that it can reverse from that point But technically it’s not a fibonacci number. 61.8%, 78.6% or 1 It has automatically drawn a line But there’s a small problem in it. I have seen this in the closing price and not marked the high and low As I have not taught candlestick to you. We generally see the high and low
As closing is end of the day but it did create high in the day and we can’t avoid it We need to convert it to candlestick for the purpose of fibonacci. Let’s do it It’s not like you don’t understand candlestick at all, I have taught you the basics We will study it in details later. As soon as I convert it to candle We see the high and the low separately. Let’s draw fibonacci again I’ll start from here and end till here. What do you understand from this? What do you want to do in Tata Motor? I’ll plot demand zone and supply zone You can plot demand zone and supply zone. If I see the demand and supply zone
The low of the previous swing, there must be a low before. At least 2 points need to meet No demand and supply zone is visible in the straight line. You can consider the previous swing’s low as demand It’s not necessary to get demand and supply zone in each trade It’s not practically possible. The fibonacci level of 309.75 and this moving average of 21-period At 307.62. 307.72 and 309.75. This is roughly at the same price point Can we say that this can be a good support as 2 parameters are more or less at the same price point? Either support or resistance? How can it be resistance as the price is moving up The price is not moving up, what’s the close? Close is at 307.75 Yes, it can be resistance as well. You were right, very good
It can be a resistance as the super trend’s signal is sell. It might show a fall from this point Very good. What will be my strategy in Tata Mator? If it goes beyond this point and Consolidates there, it indicates that it has given respect to this zone There can be a buying momentum from this point You can wait for the supertrend to change to buy for super confidence It’ll be best if the super trend also gives a buy signal If I combine it with the moving average and consider our risk reward ratio of 1:2 Then our estimated loss will be more? How? What are you considering your stop loss? The red line. I need to record a new video with you on how to add stop loss The red line will not be your stop loss. There are different ways of adding stop loss
Most likely, I’ll tell you. Let’s park that thought for the main video But most likely your stop loss will be the low of the candle in which you enter It’s not important for you to put the moving average as your stop loss The closer the stop loss, the faster you’ll be able to trade The further the stop loss, the more you’ll have to wait that depends upon your risk appetite, strategy We will record another video on it later. But you have a valid question Fibonacci, Moving Average, Supertrend, Price action If we club it all, then we get some points of convergence Moving average, supertrend, and fibonacci levels all indicate an important zone A lot of people are there in the zone and shout out whether it’s going to go up or down That’s when you react. If we combine these 3 to 4 parameters to form a zone Then that’s an important zone of either support or resistance. This is a daily chart, if I convert it to 2-hourly If you see that this candle’s high. What was the high? Rs. 309.85
The high price of 309.85 is exactly at the retracement point. Fibonacci is so strong that the market respects it at that exact point I observed that all the retracement levels are at the fibonacci points It’s very effective. The only art in this is identifying the starting and the end points The more you practice, the more refined it’ll get. Let’s pick any other stock Let’s select State Bank. When did the uptrend start in State Bank? From this point It’s fabulous. It started from this point and went upto this point
State Bank has retraced at 370 and 335, in its uptrend It has the same structure like the previous stock. It’s going above the moving average To beat the retracement level and the supertrend is asking to sell If it pushes itself here and spends some time above It’s important to spend some time on the higher level And if the supertrend becomes positive till then then you can buy State Bank You shouldn’t buy State Bank at this point. This is for long swing What if I want to do short swing? Then you need to check the 2-hourly chart Let’s add another window where I add the 2-hourly chart. Supertrend has asked to buy in this chart And if it closes above this level. This is a unique feature of TradingView That if you draw a line in one window it gets reflected in the other window of 2-hourly Fibonacci is here. If you want to trade in short swing, then there’s a signal to buy
But you need to wait for some time of you want to trade in the long swing and then enter As you will keep a longer stop loss and take profit in for long swing There is small stop loss and smaller take profit for short swing trades Let’s pick up another stock. Tell me. Tata Steel. There’s something unique in Tata Steel as it’s still making new highs. How do I map now? How will you know where will it stop above? It’s going up but it will stop at some point. How do I know where will it stop? We have a concept for this known as Fibonacci Projections Fibonacci retracement is when it reverses after it falls Projections is when we try to figure out how much will it go up after falling down Here it’s mentioned as Fibonacci Extension. It started from this point and it’s in uptrend It’s predicting the top prices. Given that it’s moved so much, it can go up till here and stop at 1180 If we’re seeing such a big move and if we reduce the move Generally we don’t see such big moves, we observe from the previous swing If I map from here to here I get the projection that it can stop till 1042. This is trying to project the future
Like you saw in the excel, the projection of 162%. It’s the same concept Is it on the fibonacci level currently? I have drawn this current level It is not on the fibonacci level now, until you see it historically. Let’s make a weekly chart Let’s see what this stock has done in the past. The last time this stock was at this high At 878 was in 2008. This can be a supply zone, there can be selling at this point You can map the fibonacci retracement taking any two points. It’s not required to take only this level
Logically, only the high and low of the previous swing is considered to calculate retracement And we calculate broader historical levels to identify breakouts. Where can it stop? It can stop here or there can be a next big move after it gives a breakout Which we can observe through fibonacci projections. What if I want to trade in it? You will have to spend extra time with god to trade in it Only god can make you enter this stock as it has become so expensive The stock started at 250 and it’s trading at 850 and it’s continuously going up But it has become very expensive stock for you to enter at this price, you have to wait for some kind of retracement How will you find out retracement? Add the fibonacci retracement You enter when it retraces by 62% between these 2 points and only if supertrend is giving you the buy signal From here to, we will assume that it can go up till here. The retracement will be at 744 If it touches 744, the supertrend is positive and it’s above the moving average Then there are good chance for its reversal. It corrects itself after going up There’s this theory of higher highs and higher lows. It will make a low when it creates a higher high
Retracement is the point where it reverses from the lower point. Those are fibonacci levels Understood? Yes sir. The trading template till now is this and now we’re going into complex charts We have tracked basic charts and basic price action till now. Moving average is a very basic indicator Fibonacci is a bit complicated and we will keep moving to more complications So that holistically any kind of fight. Have you seen the mythological movies with battles? Yes They have these bow and arrow in the mythological battles. Some arrows are there in the quiver
Which they use as a weapon and you get this sound of two arrows hitting each other Some arrows just appear when they want it like Brahmastra. Technical analysis is similar I’m giving you the armour and I can teach you how to get 10 arrows But there will be some arrows which will be gifted to you that no one has How will you get this arrow? By learning with time? No. Experience? No You just won’t get an arrow from Lord Brahma. You need to impress him. How will you get it? Hard work? No. Through penance. You need to do penance for Lord Brahma to make him happy
So that he can give the Brahmastra to you which can affect anyone There are some learnings that you will gain after spending time in the market I will give you 10 arrows that the technical analysis can give you But you will only develop guts with experience, which is the Brahmastra I can make a judgement on the chart just by seeing the chart whether it will go up or go down You’ll want to know the logic behind it. I won’t be able to explain the logic as it’s my gut That’s my Brahmastra which the market has given me so that I can use it at the correct time There is no replacement of that gut. It’s called Traders’s gut There is no replacement of the experience that you will gain in the market And you will develop your own tool based on that experience. Start using this I’ll discuss a another interesting complex topic I hope you’re enjoying this. I’m increasing the pace, I hope you’re liking it Even you need to practice and start trading. The more you practice, the better it will be
Practice makes the person perfect and it’s most applied in the stock market Start trading with Annapurna. She’s learning, you can also learn. Please share this video series, I’m getting a good response as you’ve shared it Please share more so that I get more responses. Thank you for watching this video And thank you for being with me. Bye
2021-04-09 04:49
