Golden Ratio Multiplier: Multiplied Moving Averages

The Golden Ratio Multiplier: Multiplied Moving Averages tool provides a series of dynamic price levels based on a long-term moving average multiplied by specific Fibonacci-related coefficients to identify potential cyclical tops and major resistance zones.

Usage

The Usage section describes how the script can be used to identify market cycle stages and potential exhaustion points. Traders typically use this indicator on higher timeframes, such as the daily chart, to analyze long-term price action.

Market Cycle Analysis

The indicator plots several "Multiplied Moving Averages" (MMA) derived from a base 350-period Simple Moving Average (SMA). When price approaches the higher multiplier levels (such as the x5, x8, or x13 lines), it often signals extreme overextension or historical market cycle peaks. Conversely, the lower multipliers like x1.6 or x2 often act as initial resistance during the early stages of a bull market.

Trend Identification and SMA 111

The tool includes a secondary 111-period SMA. The relationship between price and this SMA, as well as its position relative to the 350 SMA multipliers, can help identify trend shifts. For example, when the 111 SMA crosses above the 1.6x multiplier of the 350 SMA, it has historically signaled significant market momentum changes.

Details

This indicator is based on a study by @PositiveCrypto and reflects concepts popularized in cryptocurrency market cycle analysis. It utilizes a 350-day SMA as the baseline for the multiplier calculations.

The specific multipliers used are derived from the Golden Ratio and the Fibonacci sequence:

• 1.6 (Golden Ratio)
• 2.0
• 3.0
• 5.0
• 8.0
• 13.0

The script calculates these levels by multiplying the base 350 SMA by each coefficient, creating a "fan" of resistance levels that expand as the moving average trends. The inclusion of the 111 SMA provides a shorter-term trend reference to compare against these long-term expansion levels.

Settings

• Length 1: The lookback period for the base Simple Moving Average (default is 350). This serves as the foundation for all multiplier calculations.
• Length 2: The lookback period for the secondary Simple Moving Average (default is 111).
• Source: The price data used for the calculations (default is Close).

FAQ

What are the multipliers used for in this indicator?

The multipliers (1.6, 2, 3, 5, 8, and 13) are applied to the base 350-period SMA to create dynamic levels that have historically coincided with market cycle peaks and major resistance zones.

Which timeframe is best for the Golden Ratio Multiplier?

While it can be applied to any timeframe, it was originally designed for daily charts to track multi-year market cycles and long-term price targets.

How can I access the Golden Ratio Multiplier: Multiplied Moving Averages?

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