Fibonacci Structure Engine

The Fibonacci Structure Engine indicator is a comprehensive technical analysis tool that integrates live market structure, Smart Money Concepts (SMC), and weighted Fibonacci confluence to identify high-probability entry zones. It automates the process of anchoring Fibonacci levels from significant structure breaks (BOS/CHoCH) and dynamically updates them as price action evolves, ensuring levels remain relevant to the current trend leg.

Usage

The Usage section describes how the script can be used to analyze market trends and identify setups. The indicator functions as an all-in-one analysis engine where every component serves as a filter for the next.

• Structure Detection: The script automatically identifies Higher Highs (HH), Higher Lows (HL), Lower Highs (LH), and Lower Lows (LL). It highlights Break of Structure (BOS) for trend continuation and Change of Character (CHoCH) for trend reversals.
• Automated Fibonacci Anchoring: Upon a structure break, the tool anchors Fibonacci levels. For a bullish break, it anchors between the most recent swing low and the current high. It trails the "live edge" as price makes new highs and locks the levels once a confirmed pivot is detected.
• Confluence Scoring: The tool measures price proximity to specific Fibonacci levels (0.236, 0.382, 0.500, 0.618, 0.786). A score (0–100) is generated based on weighted importance, with the 0.618 "Golden Ratio" carrying the most weight.
• Entry Signals: Bullish or bearish engulfing patterns are detected but only triggered when they occur in the correct context—either within a "Discount" zone (below the 0.50 level) for longs or a "Premium" zone (above the 0.50 level) for shorts, ideally combined with a high confluence score.

Details

The script follows a specific execution logic to ensure signal quality and prevent noise:

• ATR-Filtered Pivots: Unlike standard pivot detection, this script uses an ATR-based filter. A swing is only confirmed if the price distance from the previous opposite swing exceeds a set volatility threshold (ATR × Multiplier).
• Premium/Discount Logic: The 0.50 Fibonacci level serves as the equilibrium. The engine classifies price as "Premium" (expensive) or "Discount" (cheap) relative to the current swing, which acts as a directional filter for the engulfing signals.
• Four-Phase Fibonacci Lifecycle: Levels move through four stages: Anchor on break, Trail live edge, Lock on pivot, and Update on new swings. This ensures the Fibonacci grid is always reflective of the most recent volatility.
• Zones of Interest: The "Golden Zone" (0.500–0.786) is highlighted as the primary area for retracement entries, while the "Target Zone" (-0.500 to -0.618) provides automated Fibonacci extension targets.

Settings

• Swing Detection Length: Sets the lookback period for pivot detection. Higher values result in more significant, macro-level structures.
• ATR Swing Filter & Multiplier: When enabled, it suppresses minor price fluctuations. The multiplier determines how large a move must be relative to volatility to be considered a swing.
• Signal Cooldown: Defines the minimum number of bars between consecutive Buy or Sell signals to prevent clustering in choppy markets.
• Fibonacci Level Toggles: Allows users to individually enable or disable levels (0.236, 0.382, 0.500, 0.618, 0.786) and extension targets.
• Confluence ATR Tolerance: Adjusts the "nearness" required for price to trigger a confluence score point based on current ATR.
• Show Buy/Sell Signals: Toggles the visibility of the final entry labels, which are calculated based on the combination of structure, confluence, and candlestick patterns.

FAQ

How do the Fibonacci levels update without repainting? The levels update dynamically during the "live" phase as price extends a move. However, once a structural pivot is confirmed (based on the Swing Detection Length), the levels lock. Signals (BOS/CHoCH/Buy/Sell) only trigger on confirmed bar closes to ensure they do not disappear.

What is the difference between BOS and CHoCH in this script? A BOS (Break of Structure) occurs when the price continues in the direction of the established trend. A CHoCH (Change of Character) occurs when the price breaks a swing point in the opposite direction, signifying a potential trend reversal.

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