Fibonacci Retracement/Extension

The Fibonacci Retracement/Extension indicator automatically identifies significant swing points using a ZigZag algorithm to project key Fibonacci levels for trend analysis and price forecasting. This tool allows traders to visualize potential support, resistance, and price targets by mapping retracement and extension ratios directly onto price action based on historical price structure.

Usage

The indicator can be used to identify key areas of interest during market pullbacks and trend continuations. By adjusting the ZigZag length, users can control the sensitivity of peak and trough identification, making the tool suitable for both short-term scalping and long-term trend following.

• Retracements: When a trend is identified, the tool plots levels (0.236, 0.382, 0.5, 0.618, 0.786, 1.0) to highlight where price might find support or resistance before continuing the primary move.
• Extensions: Using previous ZigZag legs, the script projects extension levels to estimate potential price targets for the next leg of the trend.
• Trend Configuration: Users can manually toggle the direction of the Fibonacci analysis to focus on bullish or bearish structures.

Details

The script utilizes a Pivot High/Low based ZigZag algorithm to filter out price noise and focus on meaningful swing points. Unlike static Fibonacci tools, this indicator dynamically updates the horizontal levels as new peaks or troughs are confirmed. The countback mechanism (ZigZagLeg) allows the user to reference specific historical segments of the ZigZag pattern, providing flexibility in choosing which swing move to measure for retracement or extension levels.

Settings

ZigZagLength

• length: Determines the sensitivity for peak and trough identification. Higher values filter more noise, while lower values identify more frequent swings.

FibsConfig Trend

• FibTrend: Sets the direction for Fibonacci analysis. Options include Bullish (1), Bearish (-1), or None (0).

FibsConfig Retracement

• FibRetraceSet CountBack: Determines which previous ZigZag leg to use for calculating retracement levels.

FibsConfig Extension

• FibExtensionSet CountBack: Determines which previous ZigZag structure to use for calculating Fibonacci extension targets.

FAQ

How do I access the Fibonacci Retracement/Extension indicator?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

Can I change the Fibonacci levels?

The current version uses standard pre-defined ratios (0.236 to 1.382+). You can adjust which swings these ratios are applied to via the CountBack settings.

Does this indicator repaint?

Because it relies on a ZigZag algorithm using pivot points with a lookback period, the most recent leg may shift until the pivot point is confirmed by the defined length.