Fibonacci Grid
Mar 28, 2022
This innovative trading indicator provides a visually compelling method for identifying potential support and resistance levels through a grid defined by diagonal lines. Each line, set at a precise 45-degree angle, is determined by Fibonacci ratios, coupled with the maximum and minimum price values over a designated lookback period. Notably, traders also have the flexibility to utilize equidistant lines, offering a customizable approach to technical analysis.
Key Features and Customization Options
- Length: Defines the lookback period for calculating maximum and minimum price values, which are critical for grid construction.
- Resolution: Adjusts the grid resolution, where higher values increase the number of lines (applicable when "Use Fibonacci Ratios" is turned off).
- Use Fibonacci Ratios: By selecting this option, the grid lines are positioned according to six specific Fibonacci ratios, providing a mathematically grounded structure.
How to Trade Using the Diagonal Grid Indicator
Each line within the grid serves as a potential support or resistance level. When two diagonal lines converge, they create channels where the price action may transpire, staying within these bounds until a breakout occurs. This breakout phenomena can signal a potential shift in market conditions or trends.
The strategic design of this grid, primarily informed by Fibonacci ratios, highlights a key trading insight: price movements that drastically deviate from the main diagonals (highlighted in orange) typically gravitate towards narrower channels. This behavior can be instrumental for traders seeking to predict market movement and identify trading opportunities.
To assist in visualizing the concept, consider the following image:
When lines are organized using Fibonacci Ratios, the resulting formation yields tighter channels as they extend from the center of the Lookback area. This is contrasted by equidistant line setups, which maintain uniform spacing between each line throughout the grid.
Frequently Asked Questions
How do I access the Diagonal Grid Indicator?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
What are the benefits of using Fibonacci Ratios in trading?
Fibonacci Ratios can help identify key levels of support and resistance, giving traders insights into potential reversal areas and trend continuations.
Can both Fibonacci and Equidistant grids be used together?
No, the settings allow for either Fibonacci-based or equidistant grids, but not simultaneously. Customize based on your trading strategy preferences.
Trading is risky and many will lose money in connection with trading activities. All content on this site is not intended to, and should not be, construed as financial advice. Decisions to buy, sell, hold or trade in securities, commodities and other markets involve risk and are best made based on the advice of qualified financial professionals. Past performance does not guarantee future results.
Hypothetical or Simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, including, but not limited to, lack of liquidity. Simulated trading programs in general are designed with the benefit of hindsight, and are based on historical information. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.
Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
As a provider of technical analysis tools for charting platforms, we do not have access to the personal trading accounts or brokerage statements of our customers. As a result, we have no reason to believe our customers perform better or worse than traders as a whole based on any content or tool we provide.
Charts used on this site are by TradingView in which the majority of our tools are built on. TradingView® is a registered trademark of TradingView, Inc. www.TradingView.com. TradingView® has no affiliation with the owner, developer, or provider of the Services described herein.
This does not represent our full Disclaimer. Please read our full disclaimer.
© 2025 LuxAlgo Global, LLC.