MavilimW

The MavilimW indicator utilizes a sequence of cascading Weighted Moving Averages (WMA) based on Fibonacci numbers to provide high-quality trend confirmation and dynamic support and resistance levels.

Usage

The Usage section describes how the script can be used to identify market direction and potential reversal points. Traders typically monitor the slope of the indicator to determine the prevailing trend:

• Trend Identification: When the indicator line is green, it signifies a bullish trend as the average is sloping upward. Conversely, a red line signifies a bearish trend with the average sloping downward.
• Support and Resistance: In trending markets, the MavilimW line acts as a dynamic support (in an uptrend) or resistance (in a downtrend) level. Price bounces off this line can be used to validate entry points.
• Price Crossovers: Price crossing above the MavilimW line is often interpreted as a bullish signal, while a cross below may indicate the start of a bearish move.

Details

The MavilimW indicator is constructed using a specific mathematical process originally developed by KivancOzbilgic. It calculates six successive Weighted Moving Averages (WMA). The first WMA is applied to the closing price, and each subsequent WMA is applied to the result of the previous one.

The smoothing periods used in these calculations are derived from the Fibonacci sequence. The script takes two initial lengths (defaulting to 3 and 5) and calculates the remaining four lengths by summing the previous two values. This results in a sequence of 3, 5, 8, 13, 21, and 34. This recursive smoothing technique is designed to remove market noise effectively while remaining more responsive to significant price shifts than a standard simple moving average of an equivalent total period.

Settings

• Show Previous Version of MavilimW?: A toggle to display a secondary plot using the original static Fibonacci parameters for comparison.
• First Moving Average length: Defines the lookback period for the first WMA in the calculation chain.
• Second Moving Average length: Defines the lookback period for the second WMA and serves as the basis for calculating all subsequent Fibonacci-based lengths.

FAQ

What happens when the indicator color changes? A color change indicates a shift in the direction of the smoothed average. A change from red to green indicates the slope has turned positive (bullish), while a change from green to red indicates the slope has turned negative (bearish).

Can the Fibonacci lengths be customized? Yes, by adjusting the "First" and "Second" moving average lengths in the settings, the entire sequence of the six cascading averages will update based on the new sum-based progression.

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