iCharts Discussions

[rameshraja]

How to use Fibonacci Numbers

All Red coloured numbers are Resistance and Support, which are Vibrating Numbers.

When a stock has closed below the Red number and subsequently when it advances and closes above the same red coloured level, the stock will keep advancing till the next Red coloured number.

Download the Attached work sheets and read that with the example given below.

Example:

Reliance capital closing figure from 21.12.2011 to 05.01.2012 were lesser than Rs.254. (Which is a Red coloured Number). On 06.01.2012, it officially closed at 261.45 which is greater than Number 254.

Long Entry:

The day when it closed above 254, it has become BUY by this Fibonacci Number and next day ensure it crosses the previous day high for technical validation. Wait for the day when it pullsback to 254 to have long Entry

Stop: Once when trade is intiated above 254, Stop becomes 246 on closing basis. ( Remember, position should not be cut if it breaks this 246 on intraday and it should close below 246)

Targets:

Once when Long Entry is initiated at 254, then targets are subsequent numbers viz.. 267- 288 – 322. If it further advances above 322, then it will face stiff resistance at next Red Number 343. The stock will find it difficult to close above 343 and once when it does it, then subsequent targets will become 356 – 364 – 369

Trailing Stops:

When stock advances from 254 to 267, then you can trail the trade with Stop placed below 254 on closing basis. And when it advances further to 288, then trail again below previous number of 267 and so on so forth.

The beauty of this Fibonacci Spiral number move, when it closes above the Red coloured Number, it will not so easily close below the previous number. Once when it closed above Red coloured number, the previous number will act as support like a rock. If it breaks, then trend might break to other lower levels.

I have show the above example for Buying into stocks with Fibonacci Spiral Numbers.

For shorting its completely reverse of the above.

The same Reliance Capital close as on 15.09.2011 was at 415.95, which is above RED Number of 411. When it closed below 398 on 22.09.2011, it declined very sharply to 316 on 30.09.2011.

Important:

While trade in progress, it might takeout TSL, but will hardly move to previous direction, unless there is a complete change of trend direction.


My thoughts:

The Fibonacci Numbers are known for vibrations as more people pay attention to particular numbers. Trading is always a challenging one and requires high amount of positive energy to encounter the waves of moves. If this number can be used as a standalone method to initiate trades, I am not for it. The charting analysis is the ultimate, and this is only supportive reference as many traders force their actions on this numbers and it vibrates.

If you can understand the functioning of the above Fibonacci Spiral Numbers, then you can easily Grasp my next thread on Gann. Gann was a brilliant trader and his methods are complex to comprehend till date. My experience with Gann methodology is awesome and surprising to me. I was keenly observing certain movements in Options market, and my mind got diverted to Gann numbers.. and started reading his book “ Tunnel through Air”. I would have read the book atleast 5 times with full concentration, and for my many questions, I got the answer from this book.

In the next thread, I will show you How gann numbers vibrates the market.

Best Wishes

Always trade well and follow the trend and not the so called “Expert” like me

[jyothi2011]

thank u very much for fibtable!

[knrajan31]

Dear ramesh raja .can you pl send me thedown load link to the above subject gann book?

i am studying definitive guide to forecasting using wd gann sq of nine

by paatric mukula .which is not elaborative.


thanks g.k nagaraj

[KatrinaaDP]

ramesh sir very good explain thank you

[kamal.icharts]

Dear Nagraj,

Email addresses or any kind of contact information are not allowed to be posted in the Forum. Please ensure that you abide by the terms and conditions of the Forum. If you are not aware of the rules, please go through http://www.icharts.in/forum/forum-usage-rules-und-regulations-t2771.html

Thanks for your understanding.

Regards

Kamal

[singh.ravee]

Mr Rameshraja,
Hello,
sir, can we apply these vibrating fibbo numbers (shown in red) on all tfs?
thanks and regards
ravee

[rameshraja]

Mr K N Rajan

I own only Hard Copy of the book.

[rameshraja]

Mr Singh Ravee

Its for positional Trades.

If you want fibonacci number for intraday trade, you can break the Red coloured number and bring down to micro levels, which I have done.

Think .. think.. how you can break these table numbers for intraday trades.

Clue for you.. You can break a single Red coloured number or between two Red colured numbers placed horizontally or vertically.

Instead me telling everything in Black and white, you can tryout by yourselves and you may comeout with a different idea than what I have.

For Daytrading, I will soon give you all, a wonderful utility with web of levels and explain you how to use this.

Best Wishes

[manojkr78]

Dear Rameshraja,

The numbers given is applicable only for scrips?? can we use it for index (nifty&banknifty) and commodity aswell. Awaiting for you reply......

Regards,
Manoj

[singh.ravee]

Mr Ramesh Raja,
Thank u so much sir for your reply.
rgds
ravee

[saurabhkurichh]

thanks sir for the knowledge

[codered]

[rameshraja]

Mr Codered

Thanks for all your advice to me to read Ramanujam's work.

I was interested only in Gann working and therefore read the book Tunnel through the Air for my own self interest.

Secondly, Please read it correctly that numbers you have referred 4558 to 4414 is from Fibonacci spiral number and not from Gann work.

Probably you would not have seen people in your circle taking risk of 145 points in positional trades. Many times, I myself had taken much more than this risk when I was looking for very big TGTS. I think its pertinent to mention here after your remark about taking this risk .. One of our ichart members , I don't want to mention his name here, took short in Nifty in 2008 peak around 6200 with SL of 400 points and he was looking for 4000 Nifty and he made the killing in the market.

However, this thread is not all about discussing one's trade.

Best Wishes

[druzva]

Dear Mr. PT and IChart team... who is this guy Codered and who has given him right to question Mr. Rameshraja in this arrogant manner ? If at all he has any question he should ask Mr.Rameshraja politly. Who has given him right to bulldoze Mr. Raja. Codered deserves Nasbandi / Pest control without any further delayed . PT bhaai hope you do not want me to tell what do i mean by Nasbandi / Pest control.

IChart team remember that people like Mr.Rameshraja, Spec, Sheshareaddy etc we have added tremendous value proposition to our life. After long time they are returning and hence such irritant should be avoided.

[ProTrader]

Druz..this is what I have said few days back, I will repeat it:

Knowledge should always flow like a river and quench the thirst of travellers on the way. Some travellers do pollute by throwing plastic and stones. But the river keeps flowing and quenching thirst.

So please leave the cleaning to us and keep the focus on learning

Happy Trading.

--ProTrader