Daily Pivots Guide

Daily Pivots are sophisticated Fibonacci-based levels calculated from the previous day’s high, low, and close. RelicusRoad Pro’s implementation provides a complete Fibonacci retracement and extension system that helps traders identify key support, resistance, and target levels with mathematical precision.

Understanding Daily Fibonacci Pivots

What Makes Them Special

Our Daily Fibonacci Pivot system:

• Calculates 13 distinct Fibonacci levels automatically
• Uses previous day’s range as base calculation
• Provides both retracement and extension levels
• Updates automatically at day change
• Works on all intraday timeframes (≤ 60min)
• Includes percentage labels for easy identification
• Based on proven mathematical relationships

The Fibonacci Grid Structure

Base Level (0.0%)

• Previous day’s low (Pivot Point)
• Foundation for all calculations
• Primary support/resistance reference

Retracement Levels (Above Base):

• R1: 23.6% - Minor resistance
• R2: 38.2% - Key retracement level
• R3: 50.0% - Psychological midpoint
• R4: 61.8% - Golden ratio resistance
• R5: 78.6% - Strong resistance
• R6: 100% - Previous day’s high

Extension Levels (Below Base):

• S1: -23.6% - Minor support extension
• S2: -38.2% - Key support extension
• S3: -50.0% - Midpoint extension
• S4: -61.8% - Golden ratio support
• S5: -78.6% - Strong support extension
• S6: -100% - Full range extension

Extended Targets (Above Previous High):

• E1: 123.6% - First extension target
• E2: 138.2% - Secondary target
• E3: 150.0% - Midpoint extension
• E4: 161.8% - Golden ratio extension
• E5: 178.6% - Strong extension
• E6: 200% - Double range target

Understanding Fibonacci Levels

How Daily Pivots Work

Daily Fibonacci Pivots are automatically calculated from the previous day’s high, low, and range to create a complete grid of support and resistance levels.

The Fibonacci Advantage:

Fibonacci ratios appear throughout nature and markets, making them naturally respected by traders:

• 23.6%: Minor level, lighter reactions
• 38.2%: Strong level, high probability reactions
• 50.0%: Psychological midpoint, trader psychology
• 61.8%: Golden ratio, strongest Fibonacci level
• 78.6%: Deep level, trend continuation or reversal
• 100%: Complete level, major decision point

Statistical Performance

Based on extensive market analysis:

• Price respects 38.2% or 61.8% levels: 72%
• Reversal at 50% level: 48%
• Price reaches 100% level: 65%
• Extension beyond 161.8%: 28%
• Multiple level confluence reactions: 83%

Core Trading Strategies

Strategy 1: Golden Ratio Trading

Focus on 38.2% and 61.8% Levels

These are the most reliable Fibonacci levels with highest reaction probability.

Setup Process:

1. Wait for price approach to R2 (38.2%) or R4 (61.8%)
2. Look for reversal signals (rejection candles, divergence)
3. Enter on confirmation with tight stop
4. Target next Fibonacci level

Example Trade:

EUR/USD Daily Setup:
Previous Day: High 1.0950, Low 1.0850
Range = 100 pips
PP (0%) = 1.0850
R2 (38.2%) = 1.0888
R4 (61.8%) = 1.0912
R6 (100%) = 1.0950

Price retraces to 1.0912 (61.8%):
- Entry: Sell at 1.0910 (rejection confirmation)
- Stop: 1.0920 (10 pips above level)
- Target 1: 1.0888 (38.2%) = 22 pips profit
- Target 2: 1.0869 (23.6%) = 41 pips profit
- Risk:Reward = 1:2.2 to 1:4.1

Strategy 2: Fibonacci Breakout Trading

Trading Extensions Beyond 100%

When price breaks above R6 (100%) or below S6 (-100%), target extended Fibonacci levels.

Breakout Setup:

1. Price closes above R6 (previous high) with volume
2. Wait for retest of broken level
3. Enter on successful retest hold
4. Target E4 (161.8%) as primary objective

Extension Targets:

• E1 (123.6%): Conservative target
• E4 (161.8%): Primary target (Golden ratio)
• E6 (200%): Aggressive target

Example Trade:

GBP/USD Extension Breakout:
Previous Day Range: 1.2600-1.2700 (100 pips)
R6 (100%) = 1.2700
E4 (161.8%) = 1.2762

Price breaks above 1.2700:
- Entry: Buy at 1.2705 (retest hold)
- Stop: 1.2690 (below broken level)
- Target: 1.2762 (E4 - 161.8%)
- Risk: 15 pips, Reward: 57 pips
- Risk:Reward = 1:3.8

Strategy 3: Fibonacci Range Trading

Multi-Level Scalping Strategy

Trade between multiple Fibonacci levels during ranging conditions.

Range Identification:

• Price oscillating between R2 (38.2%) and R4 (61.8%)
• Low volatility environment
• No major news or breakouts expected

Execution:

1. Buy at R2 (38.2%), target R4 (61.8%)
2. Sell at R4 (61.8%), target R2 (38.2%)
3. Use R3 (50%) for position management
4. Stop beyond range boundaries

Strategy 4: Confluence Trading

Multiple Fibonacci Level Alignment

Highest probability setups occur when multiple Fibonacci levels align.

Confluence Types:

• Daily + Weekly Fibonacci alignment
• Fibonacci + Round numbers (1.3000, 1.2000)
• Fibonacci + Previous support/resistance
• Multiple timeframe Fibonacci clusters

Trading Confluence:

1. Identify 3+ level alignment within 10-15 pips
2. Increase position size (1.5x normal)
3. Use wider stops (15-20 pips)
4. Target next major confluence zone
5. Expect stronger reactions

Session-Specific Applications

London Session (3:00-12:00 GMT)

Characteristics:

• Highest volatility and volume
• Often tests multiple Fibonacci levels
• Best for breakout and extension trading
• Strong respect for 61.8% levels

Optimal Strategies:

• Golden ratio trading (38.2%, 61.8%)
• Extension breakouts above 100%
• Range breakouts with volume
• News-driven Fibonacci reactions

New York Session (13:00-22:00 GMT)

Characteristics:

• Continuation of London moves
• Tests Fibonacci extensions
• Potential reversal at extreme levels
• USD pair focus

Optimal Strategies:

• Extension trading (E4, E6 targets)
• Fibonacci retracements on pullbacks
• Range continuation patterns
• End-of-day Fibonacci holds

Asian Session (22:00-8:00 GMT)

Characteristics:

• Lower volatility and range
• Respect for Fibonacci boundaries
• Limited extension moves
• Consolidation patterns

Optimal Strategies:

• Range trading between levels
• Smaller position sizes
• Conservative targets
• Major pair focus (EUR/USD, GBP/USD)

Advanced Fibonacci Techniques

Multi-Timeframe Analysis

Fibonacci Pyramid Approach:

1. Daily Fibonacci: Primary structure
2. 4-Hour Fibonacci: Secondary levels
3. 1-Hour Fibonacci: Entry refinement

Confluence Strategy:

• Daily 61.8% + 4H 38.2% = Strong resistance
• Daily 38.2% + 1H 61.8% = Entry precision
• Multiple timeframe alignment = Highest probability

Dynamic Fibonacci Adjustments

Intraday Updates:

When new intraday high/low exceeds previous day:

• Original levels remain valid
• New Fibonacci grid calculated
• Trade both level sets
• Focus on confluence zones

Fibonacci Extensions Beyond 200%

Extreme Extension Levels:

• 261.8% (E7): Rare but powerful target
• 300% (E8): Triple range extension
• 423.6% (E9): Extreme momentum target

Usage Guidelines:

• Only in strong trending markets
• Require significant volume confirmation
• Use smaller position sizes
• Trail stops aggressively

Risk Management for Fibonacci Trading

Position Sizing Rules

Level-Based Calculation:

1. Identify Fibonacci level distance
2. Calculate pip risk to stop loss
3. Apply 1-2% account risk rule
4. Adjust for level importance

Example:

For a trade buying EUR/USD at the 38.2% level with a stop below the 23.6% level (24 pips risk), calculate your position size based on your account size and risk tolerance to ensure you’re only risking 1-2% of your account on the trade.

Stop Loss Placement

Conservative Approach:

• 15-20 pips beyond Fibonacci level
• Accounts for false breaks and noise
• Lower win rate, better risk:reward

Aggressive Approach:

• 8-12 pips beyond Fibonacci level
• Tighter risk control
• Higher win rate, requires precision

Take Profit Strategy

Systematic Approach:

1. Target 1: Next Fibonacci level (1:1 R:R minimum)
2. Target 2: Second Fibonacci level (1:2 R:R)
3. Target 3: Major confluence or extension (1:3+ R:R)

Partial Profit Taking:

• 50% at Target 1
• 30% at Target 2
• 20% at Target 3 or trail

Integration with Other Indicators

Fibonacci + Support/Resistance

Enhanced Confluence:

When Fibonacci levels align with:

• Previous swing highs/lows
• Trendline intersections
• Round number levels
• Moving average confluences

Trading Approach:

• Increase confidence and position size
• Expect stronger reactions
• Use tighter stops relative to confluence
• Target next major confluence zone

Fibonacci + Volume Analysis

Volume Confirmation:

• High volume at Fibonacci level = Strong reaction likely
• Low volume = Potential level break
• Volume divergence = Reversal warning
• Spike volume = Breakout confirmation

Fibonacci + Price Action

Candlestick Patterns at Fibonacci Levels:

• Doji at 61.8% = High reversal probability
• Hammer at 38.2% = Bounce likely
• Shooting star at 78.6% = Rejection expected
• Engulfing pattern = Strong confirmation

Common Fibonacci Trading Mistakes

Technical Errors

❌ Wrong Daily Calculation

• Using incorrect timezone for daily reset
• Missing weekends and holidays
• Using close instead of actual high/low

❌ Ignoring Level Hierarchy

• Treating all levels equally
• Missing 38.2% and 61.8% importance
• Overtrading minor levels (23.6%)

❌ Poor Entry Timing

• Entering exactly at level without confirmation
• Missing retest opportunities
• Chasing price to levels

Psychological Pitfalls

❌ Level Obsession

• Seeing Fibonacci levels everywhere
• Forcing trades to fit levels
• Ignoring market context

❌ Perfectionist Trading

• Waiting for perfect Fibonacci setup
• Missing good opportunities
• Over-analyzing level relationships

Performance Optimization

Fibonacci Level Priority

High Priority Levels:

1. 61.8% (Golden ratio) - Strongest reaction
2. 38.2% (Golden ratio complement) - High probability
3. 50% (Psychological) - Trader psychology
4. 100% (Previous extreme) - Major decision point

Medium Priority Levels:

• 23.6% (Weak Fibonacci)
• 78.6% (Deep retracement)

Extension Priority:

1. 161.8% (Golden ratio extension)
2. 200% (Double range)
3. 123.6% (Conservative extension)

Statistical Tracking

Key Metrics to Monitor:

• Success rate by Fibonacci level
• Average R:R achieved per level
• Best performing currency pairs
• Optimal session times
• Confluence vs single level performance

Sample Tracking Table:

Practical Examples and Case Studies

Case Study 1: Perfect Golden Ratio Setup

EUR/USD Daily Fibonacci Grid:

Previous Day: High 1.0850, Low 1.0750 (100 pip range)
PP (0%) = 1.0750
R2 (38.2%) = 1.0788
R4 (61.8%) = 1.0812
R6 (100%) = 1.0850

Market Context:
- Uptrend on daily chart
- Pullback to test 61.8% level
- Volume declining on pullback

Setup:
Price approaches 1.0812 (61.8%) with:
- Bullish divergence on RSI
- Hammer candlestick formation
- Support at previous swing low nearby

Execution:
- Entry: Buy at 1.0814 (above hammer high)
- Stop: 1.0800 (below 61.8% level)
- Target 1: 1.0835 (halfway to 100%)
- Target 2: 1.0850 (100% level)

Result:
- Target 1 hit: +21 pips (1:1.5 R:R)
- Target 2 hit: +36 pips (1:2.6 R:R)
- Total profit: 57 pips, Risk: 14 pips

Case Study 2: Extension Breakout Trade

GBP/USD Fibonacci Extension:

Previous Day: High 1.2700, Low 1.2580 (120 pip range)
R6 (100%) = 1.2700
E4 (161.8%) = 1.2774

Setup:
- Strong bullish momentum
- Break above 1.2700 with volume
- Retest of 1.2700 holds

Execution:
- Entry: Buy at 1.2705 (retest confirmation)
- Stop: 1.2685 (below broken level)
- Target: 1.2774 (161.8% extension)

Result:
- Target hit: +69 pips
- Risk: 20 pips
- R:R achieved: 1:3.45

FAQ

Q: When do Fibonacci levels reset? A: At day change (typically midnight broker time). New levels calculated from previous day’s range.

Q: Which Fibonacci levels are most reliable? A: 38.2% and 61.8% show highest reaction rates (68-73%). Focus on these for best results.

Q: How do I handle gaps over Fibonacci levels? A: Levels remain valid. Monitor for gap fills back to Fibonacci levels as high-probability trades.

Q: Should I trade every Fibonacci level touch? A: No. Require additional confirmation (volume, price action, confluence) for higher probability.

Q: What’s the difference between Fibonacci and regular pivot points? A: Fibonacci pivots use mathematical ratios based on previous range. Regular pivots use simple arithmetic (H+L+C)/3.

Q: Can I use Fibonacci levels for scalping? A: Yes, especially on 5-15 minute charts. Focus on major levels (38.2%, 50%, 61.8%) with tight stops.

Q: How do I handle multiple timeframe Fibonacci conflicts? A: Higher timeframe takes priority. Use lower timeframe for entry refinement within higher timeframe bias.

Q: What happens when price gets stuck between Fibonacci levels? A: Creates consolidation zone. Trade range between levels or wait for breakout with volume confirmation.

Continue to Scalping Arrows or review Strategy Guides.