Fibonacci Bars

The Fibonacci Bars indicator compresses approximately 1,600 historical candles into a sequence of 16 distinct bars to provide a multi-fractional view of price action over time. By utilizing Fibonacci intervals for lookback periods, it allows traders to visualize long-term market trends and short-term volatility simultaneously on a single chart overlay.

Usage

The Fibonacci Bars tool is used to identify the historical context of current price movements. The 16 bars displayed represent different lookback windows; as you look further back (leftward in the sequence), each bar represents a larger cluster of historical data based on the Fibonacci sequence (1, 2, 3, 5, 8, 13, ..., 1597).

Traders can use this tool to:

• Analyze Trend Momentum: By comparing the color and size of the compressed bars, you can determine if the long-term historical bias (left bars) aligns with recent price action (right bars).
• Identify Mean Reversion: The indicator draws a dashed midline representing the median price of the entire 1,597-period lookback. Price crossing this line can signal a shift in the long-term trend.
• Visualizing Volatility: The width and wick length of the compressed bars highlight periods of high or low volatility across different temporal scales.

Details

The script functions by sampling OHLC data across specific intervals defined by Fibonacci numbers. Each of the 16 bars is constructed using a custom function that calculates the Open, High, Low, and Close for its respective range.

• The most recent bar represents the immediate past (1-0 candles).
• The furthest bar on the left represents a aggregate of nearly 600 candles (from 1597 to 987 candles ago).
• A solid line connects the average price of the most recent data group to the oldest data group, providing a visual slope of the overall trajectory.

Settings

The current implementation of the script uses hardcoded Fibonacci constants to ensure mathematical consistency with the concept.

• Bullish Color: Set to Green (#089981) to represent bars where the close is higher than the open.
• Bearish Color: Set to Red (#f23645) to represent bars where the open is higher than the close.
• Midline/Average Line Color: Set to Blue (#5b9cf6) for the median and trend slope lines.

FAQ

How do I interpret the different widths of the bars?

The width of the bars in Fibonacci Bars is visually scaled to reflect the "weight" of the data they represent, with older, larger candle clusters appearing wider to distinguish them from recent activity.

What does the dashed horizontal line represent?

The dashed line is the 1,597-period midline (Median). It is calculated as the midpoint between the highest high and lowest low of the last 1,597 candles, serving as a long-term equilibrium level.

How can I access this indicator?

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