Are Fibonacci numbers' ratios magical numbers that can generate effective signals in trading? We traders are constantly learning, and an important skill is identifying the end of a cycle because that's when a trade is born. I have dedicated my professional career to identifying different patterns that are effective for training my clients. After studying Fibonacci ratios for years, I found that they do not provide an ideal way to enter the market.
After testing various ways to obtain support and resistance that help guide us and protect our trade during the pullback, I have concluded that liquidity zones, which are simply those places where most stop orders are located, are the ideal places to identify the possible reversal zone. Once the price has turned and we decide to enter the trade, we can use that zone as a level to set the stop loss.