Fibonacci 5 Candles Retracement

The Fibonacci 5 Candles Retracement indicator is a technical analysis tool that automates trend detection and Fibonacci level calculation to identify high-probability pullback entry points. It specifically identifies trends through five consecutive candles of the same color and dynamically plots Fibonacci retracement levels for precise trade execution.

Usage

The indicator identifies a trend when five consecutive green (bullish) or red (bearish) candles appear. Once a trend is established, it marks a "Start" and "End" point.

• Bullish Scenario: The script plots a long entry when the price pulls back to a selected Fibonacci level (25%, 50%, 60%, or 70%).
• Bearish Scenario: The script plots a short entry during a retracement to the upside after five red candles.
• Dynamic Updates: The "End" point updates automatically if the price continues making new trend highs or lows, ensuring the Fibonacci levels remain relevant to the current market move.
• Trend Completion: By default, a trend ends when a candle closes in the opposite direction. If "Extended Trend" is enabled, the trend remains active until the price closes beyond the 50% retracement level.

Details

This tool is built to handle the dual nature of trend following and mean reversion. By requiring five consecutive candles, it filters out minor market noise. The Fibonacci levels are calculated by treating the Start point as 100% and the End point as 0% for retracement purposes. The strategy also includes an "Extended Take Profit" feature, which allows users to set targets beyond the 100% trend completion mark (e.g., 103% or 105%).

Settings

• Visualization: Options to toggle Start/End labels, Fibonacci lines (25%, 50%, 60%, 70%), and pending order labels.
• Line Colors: Customization for all plotted horizontal lines to match chart themes.
• Strategy:
  • Pending Order Level: Select which Fibonacci level (25%, 50%, 60%, 70%) triggers an entry.
  • Extended TP (%): Adds a percentage buffer to the Take Profit target beyond the trend start/end.
• Filters:
  • Minimum Trend (pips): Ignores trends that do not meet a minimum price distance requirement.
  • Use EMA Filter: Only allows long trades when EMA 50 > EMA 200 and short trades when EMA 50 < EMA 200.
  • Extended Trend: Changes the logic for trend freezing based on the 50% retracement level.
• Alerts: Toggle for notifications regarding pending order creation, updates, and trade execution.

FAQ

How do I use the Fibonacci 5 Candles Retracement on my charts? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

Why are some trend labels gray instead of red or green? Gray labels indicate that the identified trend did not meet your "Minimum Trend (pips)" requirement in the Filters section.

Can I change the stop loss level? In this specific logic, the Stop Loss is automatically anchored to the "Start" level of the trend to maintain the integrity of the Fibonacci structure.