Testing the Accuracy of Fibonacci Retracement Levels Using Artificial Intelligence

During the last few years the Indian stock market has witnessed an overwhelmed participation of new investors and the 42 lakh DEMAT Account openings in 2023 quoted by Economic Times is a prime evidence of that. Considering the rising inclination of Euphoria towards the stock market, arming oneself with the knowledge of technical analysis has become the need of the hour. In intraday and Swing Trading, taking a right entry and exit is the most crucial thing in order to make agood amount of profit and that ultimately showcases the importance of identifying a trend reversal. One of the most popular indicator for identifying a trend reversal is Fibonacci Retracement. Fibonacci Retracement is based on Fibonacci sequence and it helps a trader in plotting the support and resistance levels. Purpose and Focus - There are many research papers explaining how Fibonacci retracement works and how to use that but there is no literature that showcases the empirical evidence that demonstrates the accuracy of Fibonacci retracement in identifying the trend reversals. Back testing of one small cap, mid cap and large cap stock listed on NSE will be done on different time frames using Artificial Intelligence and trading view to test the accuracy and effectiveness of Fibonacci retracement.