Abstract Fibonacci retracement has long served as a foundational tool in capital market trading strategies for identifying potential support and resistance levels. The classical Fibonacci retracement ratios—0.236, 0.382, 0.5, 0.618, 0.786, and 1—are widely employed by traders to determine optimal entry and exit points. Among these ratios 0.618 is commonly referred to as the golden ratio due to its frequent occurrence in price retracement behaviour. Over the years, extensive empirical and theoretical studies have examined the effectiveness of these classical Fibonacci levels across various asset classes and market conditions. However, the Fibonacci sequence generates several additional ratios beyond the commonly accepted levels, many of which remain largely unexplored in academic and applied research. This study focuses on one such unconventional yet mathematically valid retracement ratio, 0.09, derived from extended Fibonacci relationships. The primary objective of this research is to evaluate the effectiveness of the 0.09 Fibonacci retracement level as an early entry point in swing trading strategies. Using empirical analysis, the study examines whether this deeper retracement level can significantly enhance risk–reward dynamics, reduce downside risk, and improve overall trading performance.
Patnaik et al. (Mon,) studied this question.