Fibonacci retracement levels are highly used by professional traders, as these levels acts as support resistance. This tool just needs recent high (Swing High) and recent low (Swing Low) to plot retracement levels over the nifty future charts. Price action reacts to these levels in a very accurate fashion, you will see market finding support or facing resistance around these levels. Professional traders are main traders at Fibonacci levels; they are mainly concentrated at tops and bottoms of the trend, unlike the retail traders. You can see on nifty future chart, how this index reacted to Fibonacci retracement level. Just after moving towards this level a sharp bounce was seen by gaining over 150 points in just 2 days. In this case we have found the exact bottom and this strategy will even work for the finding tops for nifty future.
About Bhaveek PatelBhaveek Patel is one of the most successful traders, technical analyst, and investor, his areas of interest include stock market, forex, and gold trading. Apart from this, he is often seen in the golf course. He is having more than 10 years of experience in trading, had placed his first order on 19 June 2006 with IndiaInfoline.
i was a commodities trader previously, but after learning the technical analysis I have found stock markets more comfortable.
Support and resistance levels works well in stocks and index like nifty and banknifty. But commodity prices are affected by number of factors like local currencies, global demand, global news, many more. So trading stocks is better option always.