Fibonacci Levels

The Fibonacci Levels indicator is a technical analysis tool that plots dynamic Fibonacci retracement and extension levels based on volume-weighted moving averages (WMA) of price ranges. It aims to help traders identify potential continuation or reversal patterns by visualizing how price interacts with major ratio lines over short and long-term lookback periods.

Usage

The tool displays a series of color-coded lines on the chart representing various Fibonacci ratios. Traders can use these levels as dynamic support and resistance.

• Long-Range Fibs: These levels (0, 0.236, 0.382, 0.50, 0.618, 0.764, 1, 1.618, 2.618) are calculated over a longer lookback period (default 420 bars). The 0.50 level is highlighted as a primary area for potential trend changes.
• Short-Range Fibs: Represented by heavy white lines, these indicate the High (Fib 1) and Low (Fib 0) of a shorter lookback period (default 240 bars). When price approaches these points, traders should look for immediate continuation or reversal signals.
• Moving Average Oscillators: The Red, Green, Yellow, and Blue lines are custom moving averages derived from the interaction between the short and long-range Fibonacci calculations. These are intended to show momentum and potential near-future price movements.

Details

Unlike standard static Fibonacci tools, this script applies a Weighted Moving Average (WMA) to the Fibonacci levels themselves. This smoothing process creates a "path" of levels that adjusts as new price data enters the lookback window.

The logic incorporates:

• Short Range: Calculates the highest high and lowest low of hlc3 over the short lookback.
• Long Range: Calculates levels based on the highest high and lowest low of the standard high/low prices over the long lookback.
• Custom Ratios: Includes non-standard calculations like the "Neg" Fibonacci level (lowest low + the distance between 0 and 0.618) to provide additional downside targets.

Settings

General Settings

• Trailing Stop (#ATR): Adjusts the sensitivity of the internal ATR-based logic (Delta).
• Large Time Frame On/Off: Toggles the visibility of long-range calculations.
• Small Time Frame On/Off: Toggles the visibility of short-range calculations.
• Time Range (From/To): Filters the historical data used for the calculations based on specific dates.

Lookback Settings

• Short Fibonacci Days Lookback: Sets the period for short-term level calculations (default 240).
• Long Fibonacci Days Lookback: Sets the period for long-term level calculations (default 420).

FAQ

How do I interpret the colored oscillator lines?

The colored lines (Red, Green, Yellow, Blue) represent moving average interactions. Crossovers between the yellow (Cumulative Average) and red lines are often used to identify changes in trend momentum.

What should I look for at the heavy white lines?

The white lines represent the boundaries of the short-term range. Price interacting with these levels often signals a potential breakout or a rejection back into the long-term Fibonacci range.

How can I access this script?

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