Fibonacci-Only Strategy

The Fibonacci-Only Strategy indicator is a comprehensive trading tool designed to automate trade entries and exits based on custom Fibonacci retracement levels combined with dynamic risk management.

Usage

The script is designed for traders who utilize Fibonacci levels to identify support and resistance. It automatically calculates levels based on the high/low range of the last 100 bars and generates signals based on two primary methods:

• Touch Entries: Occur when the price reaches a Fibonacci level and confirms the direction with a bullish (for long) or bearish (for short) candle.
• Break Entries: When the "Use Break Strategy" setting is enabled, the script identifies opportunities where the price breaks through a level and confirms the momentum.

The strategy manages active trades using a multi-layered exit approach. It places seven incremental take-profit targets (at 0.5% intervals) to scale out of positions. Risk is managed through either a fixed percentage stop loss or an ATR-based dynamic stop, which can further be enhanced with an optional trailing stop to protect unrealized gains.

Details

The strategy focuses on three specific Fibonacci levels: 19%, 82.56%, and a reverse 19% level. These levels are calculated dynamically using the ta.highest and ta.lowest functions over a 100-bar lookback period.

The execution logic ensures that every entry is validated by price action (the confirmation candle) before a signal is triggered. For exits, the script uses strategy.exit calls that handle the proportional closing of the position (approximately 14.28% per take profit level) to ensure a smooth exit profile.

Settings

General Settings

• Select Timeframe: Sets the operational timeframe for the strategy calculations (e.g., 15m, 1h, Daily).
• Use Break Strategy: Toggles whether the script should trigger entries on level breaks in addition to level touches.

Risk Management

• Stop Loss %: Defines the fixed percentage distance for the stop loss from the entry price.
• Use ATR for Stop Loss: When enabled, the stop loss is calculated based on market volatility (ATR) instead of a fixed percentage.
• ATR Multiplier for SL: Determines the sensitivity of the ATR-based stop loss.
• Use Trailing Stop: Enables a dynamic trailing stop that follows the price as the trade moves into profit.
• Trailing Stop %: Sets the percentage distance for the trailing stop mechanism.

FAQ

How do I use the Fibonacci-Only Strategy?

To use this tool, add it to your chart and select your preferred timeframe. You can choose between aggressive "Break" entries or more conservative "Touch" entries depending on your trading style.

What are the default Fibonacci levels used?

The strategy utilizes the 19%, 82.56%, and 19% reverse levels, which are automatically updated based on the highest and lowest prices of the last 100 bars.

How can I access Fibonacci-Only Strategy?

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