Fibonacci Imbalance Zones

The Fibonacci Imbalance Zones indicator is an open-source technical tool that automates the detection of confluence zones by merging Fibonacci retracements with Fair Value Gaps (FVG) and Order Blocks. It aims to bridge classical Fibonacci analysis with modern Smart Money Concepts (SMC) to identify high-probability institutional interest zones programmatically.

Usage

The script automatically identifies market structure by detecting significant swing highs and swing lows to draw Fibonacci levels. Traders can use the indicator to find "Confluence Zones"—areas where a Fibonacci level aligns with an unmitigated FVG or a volume-filtered Order Block.

• Trend Identification: The indicator draws a structure line between pivots. In an uptrend, look for bullish confluences in "Discount" zones (typically the 0.500-0.786 Fibonacci range).
• FVG Classification: Gaps are color-coded based on their position relative to fair value. Gold boxes represent Premium FVGs (selling interest), while Cyan boxes represent Discount FVGs (buying interest).
• Confluence Strength: Labeled boxes appear when multiple factors align. A score is assigned based on factors like harmonic ratios, volume, and premium/discount status.
• Entry Signals: When price enters a "Golden Pocket" confluence zone (0.500-0.786) and produces a confirming candle close, circle markers are plotted to signal potential entries.

Details

The indicator utilizes Pine Script v6 custom types to track the lifecycle of various technical elements.

• FVG Mitigation: It monitors price action to detect when a gap has been "filled" or mitigated, updating the visual style to reflect its decreased relevance.
• Order Block Filtering: Unlike standard detectors, this tool filters Order Blocks by volume (requiring 1.5x the 20-period average) to focus on institutionally backed movements.
• Proximity Logic: Confluence is determined using an ATR-based tolerance setting, ensuring that levels are considered overlapping even if they do not match exactly to the tick.

Settings

Fibonacci Settings

• Swing Lookback / Pivot Strength: Controls the sensitivity of swing high and swing low detection.
• Level Toggles: Independently enable or disable standard ratios (0.236, 0.382, 0.500, 0.618, 0.786) and extensions.

FVG Detection

• FVG Max Age: Limits how many bars an unmitigated FVG remains visible.
• Track Mitigation: Enables the real-time tracking of price filling the gaps.
• Min FVG Size: Filters out small, insignificant gaps based on an ATR multiplier.

Confluence & Advanced Settings

• Confluence Tolerance: Sets the ATR-based distance for a Fibonacci level to be considered "overlapping" with an FVG.
• Min Confluence Strength: Filters the display of confluence boxes based on the calculated score.
• Show Harmonic Ratios: Adds institutional levels like 0.127, 0.707, and 0.886.
• Color Scheme: Allows switching between Quantum, Classic, Professional, or Minimal visual styles.

FAQ

How do I interpret the Confluence Strength? The strength increases when more factors align, such as a Fibonacci level overlapping both an FVG and a volume-backed Order Block. Higher scores (3+) generally indicate more significant institutional interest.

What is the difference between Premium and Discount FVGs? Premium FVGs are located above the fair value of the swing range, suggesting potential resistance or shorting opportunities. Discount FVGs are below fair value, suggesting support or buying opportunities.

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