Fibonacci Zone Oscillator With MACD Histogram

The Fibonacci Zone Oscillator With MACD Histogram indicator provides a multi-layered momentum perspective by combining a price-to-centerline percentage oscillator with a scaled MACD histogram. This tool helps traders identify price positioning within key Fibonacci zones relative to a lookback period while simultaneously tracking short-term momentum shifts.

Usage

The indicator consists of two primary components that can be viewed together or separately:

• Fibonacci Zone Columns: These represent the position of the closing price as a percentage of the Donchian middle line. The colors reflect different market conditions based on Fibonacci levels:
  • Green (Solid): Price is in the uptrend area (above 0.236 Fib).
  • Green (Faint): Price is in the buyers' area (between 0.236 and 0.382 Fib).
  • Gray: Price is in the center/neutral area (between 0.382 and 0.618 Fib).
  • Red (Faint): Price is in the sellers' area (between 0.618 and 0.764 Fib).
  • Red (Solid): Price is in the downtrend area (below 0.764 Fib).
• MACD Histogram: Plotted as a blue line and area, it acts as a "short-term power momentum" filter. It is scaled to match the range of the Fibonacci columns to ensure both metrics are comparable on the same sub-pane.

Traders often look for confluence where both the columns and the MACD signal consistent trend direction across multiple timeframes to identify high-probability setups.

Details

The script utilizes a Donchian Channel framework to establish a range (highest high and lowest low) over a specified lookback. The middle line of this channel serves as the zero-point for the oscillator. The script then calculates Fibonacci retracements (23.6%, 38.2%, 61.8%, and 76.4%) relative to this range to determine the zone-based coloring.

The MACD component is uniquely derived: it uses the general lookback for the slow EMA, half that value for the fast EMA, and one-third for the signal line. This ensures the MACD remains synchronized with the overall lookback window used by the Fibonacci calculations.

Settings

• Calculate for last ## bars: Sets the lookback period for finding the high/low range and calculating EMAs if the script lookback toggle is off.
• Script sets lookback: When enabled, the indicator automatically adjusts the lookback period based on the chart's timeframe (e.g., 21 for Daily, 42 for 15m).
• Show feedback label about lookback: Toggles a visual label on the chart indicating the current active lookback value.
• Toggle combination of columns and MACD or just one: Controls whether the Fibonacci columns and MACD line are displayed simultaneously.
• Toggle Fibzone columns / histogram with volume event marks: Switches the primary display mode between the Fibonacci oscillator and the MACD histogram.

FAQ

How do I interpret the colored columns?

The columns show where the current price sits within a range. Solid Green indicates a strong uptrend with multiple supports, while solid Red indicates a strong downtrend with multiple resistance levels.

Why does the lookback change when I change timeframes?

If "Script sets lookback" is enabled, the tool optimizes the lookback period for different periodicities to provide better context for intraday versus daily or weekly swings.

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.