Fibonacci + RSI - Strategy

The Fibonacci + RSI - Strategy indicator is a specialized intraday scalping tool that combines mean-reversion Fibonacci levels with the Relative Strength Index (RSI) to identify potential market reversals.

Usage

The strategy is designed for short-term timeframes such as the 1m, 5m, 15m, and 30m intervals. It functions by identifying overextended price action relative to statistical volatility bands (Fibonacci levels) and confirming the momentum exhaustion with RSI.

• Long Entry: Triggered when the price falls below the lower Fibonacci level (fd1) and the RSI crosses above the oversold threshold.
• Short Entry: Triggered when the price rises above the upper Fibonacci level (fu1) and the RSI crosses below the overbought threshold.
• Exit Logic: The strategy utilizes dynamic profit targets based on inner Fibonacci levels (0.764) and includes a safety stop-loss percentage to manage risk during high volatility.

Details

The indicator constructs its levels using a Volume Weighted Moving Average (VWMA) as a baseline, combined with standard deviation multipliers to create Fibonacci-weighted bands. This approach creates a dynamic "envelope" around price action.

• Fibonacci Bands: Unlike static retracements, these bands adapt to market volatility. The levels are derived from the product of the multiplier and standard deviation, scaled by specific Fibonacci ratios (1.0 and 0.764).
• Momentum Confirmation: By requiring the RSI to exit extreme zones (30/70) while price is outside the outer bands, the strategy attempts to filter out "falling knife" scenarios, waiting for a slight bounce or shift in momentum before entry.

Settings

RSI

• Length: Sets the lookback period for the RSI calculation (default is 14).
• Over Sold %: The threshold level used to identify oversold conditions (default is 30).
• Over Bought %: The threshold level used to identify overbought conditions (default is 70).

Fibonacci

• Length: The period used for the VWMA basis and Standard Deviation calculations.
• Source: The price data used for calculations (default is HLC3).
• Multiplier: Adjusts the width of the Fibonacci bands to account for different volatility environments.
• Level: A scaling factor (in thousandths) to determine the inner target levels (e.g., 764 represents the 0.764 ratio).

Strategy

• Stop Loss (%): A percentage-based stop loss calculated from the average position price to protect against outsized moves.

FAQ

How do I access Fibonacci + RSI - Strategy?

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

Which timeframes are best for this strategy?

The strategy is optimized for intraday scalping, with the best results typically observed on the 1-minute to 30-minute timeframes.

Does this indicator repaint?

No, the strategy logic is based on confirmed bar closes and standard Pine Script strategy functions to ensure historical backtesting accuracy.