Auto Fib

The Auto Fib indicator automatically calculates and plots Fibonacci retracement levels based on the highest high and lowest low over a user-defined lookback period to identify potential support and resistance zones.

Usage

The Usage section describes how the script can be used, examples should be provided in this section. This section also focuses on how main settings affect the indicator interpretation and output.

The tool is primarily used to identify institutional price levels where reversals or trend continuations are likely to occur. By observing the interaction between price action and the plotted ratios, traders can determine:

• Support and Resistance Identification: The 0.382, 0.5, and 0.618 levels often act as primary areas where price stabilizes during a retracement.
• Trend Strength: Price maintaining a position above the 0.5 level in an uptrend suggests bullish strength, while failing to break above it in a downtrend suggests continued bearish momentum.
• Dynamic Updating: Unlike manual Fibonacci tools, this indicator updates automatically as new highs or lows are formed within the specified lookback window, ensuring the levels remain relevant to current market volatility.

Details

The Auto Fib indicator utilizes a fixed lookback period to establish the price range (high to low). Based on this range, it calculates the following standard Fibonacci ratios:

• 1.0 (100%): The highest price point within the period.
• 0.764: Calculated as $Max - (0.236 \times Range)$.
• 0.618: The "Golden Ratio" retracement level.
• 0.500: The midpoint of the range.
• 0.382: A shallow retracement level.
• 0.236: Calculated as $Min + (0.236 \times Range)$.
• 0 (0%): The lowest price point within the period.

The script is based on concepts originally popularized by LazyBear but adapted for direct overlay on the price chart. It includes integrated alerts that trigger when the price crosses the 0.5 equilibrium level, signaling a potential shift in market sentiment.

Settings

• Fib Length: Determines the number of bars used to calculate the highest high and lowest low. A larger value results in more significant, long-term levels, while a smaller value tracks short-term price swings.

FAQ

How do I interpret the colored zones? The colored zones provide a visual heatmap of the Fibonacci range. The outer zones (Red) represent the extremes of the range, while the inner zones (Green/Blue) highlight the core retracement areas where price is most likely to react.

Can I use this on any timeframe? Yes, the indicator adapts to the timeframe of the chart. On lower timeframes, it will capture intraday swings, while on higher timeframes like Daily or Weekly, it will map out major historical cycles.

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