⚠️Why does Fibonacci work in trading?⚠️
It all started in 1202, when Leonardo of Pisa, better known as Fibonacci, presented a curious sequence of numbers to the world: 0, 1, 1, 2, 3, 5, 8, 13... Each number is the sum of the previous two . Simple, right? However, this sequence unlocked one of nature's greatest secrets.
The Fibonacci sequence appears everywhere: the spiral of a seashell, the petals of a sunflower, the branching of trees—even the structure of galaxies. These patterns align with the golden ratio (1.618), a universal model for balance and proportion.
How does Fibonacci apply to trading?
Markets, like nature, are driven by psychology and patterns. Traders rely on Fibonacci retracements to identify key price levels where trends may pause, reverse or continue.
The Golden Pocket: The Trader’s Sweet Spot
The "golden pocket" lies between the 61.8% and 65% retracement levels — a magnet for reversals. This is where buyers or sellers often regroup, creating high probability setups.
How to use it in your trading
1. Identify a trend: draw Fibonacci from swing low to swing high (or vice versa).
2. Look for the Golden Pocket: Watch for price action in the 61.8%–65% area.
3. Combine confluences: Fibonacci-aligned volume, candles, or moving averages strengthen your setup.
The Fibonacci sequence is more than numbers; it is the rhythm of nature, reflected in the ebb and flow of markets. Learn to identify these levels and you will be trading in harmony with forces as old as time.
Trade wisely.
