# Fibonacci Trailing Stop The Fibonacci Trailing Stop derives a trailing stop line from Fibonacci levels of the most recent swing high and low, moving only in the trend's direction until price breaks through it. A selectable level and close-or-wick trigger tune how tight it runs, while shadows of past Fibonacci patterns expose support and resistance zones worth watching. - Indicator in the LuxAlgo Library, by LuxAlgo, published Sep 12, 2023. - Access: free. - Concepts: [Trailing Method Taxonomy](https://www.luxalgo.com/library/concept/trailing-method-taxonomy/) (primary), [Fib Retracement](https://www.luxalgo.com/library/concept/fib-retracement/) - Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=cmpwn1o9b002avhsgqls3ciwv - Page: https://www.luxalgo.com/library/indicator/fibonacci-trailing-stop/ **Fibonacci Trailing Stop** turns swing-anchored Fibonacci levels into a [trailing stop](https://www.luxalgo.com/library/concept/trailing-method-taxonomy/) that only ever moves with the trend. Each new swing high or low redraws the underlying Fibonacci pattern, and your chosen level becomes the stop line, rising beneath price in uptrends, falling above it in downtrends, and calling a reversal the moment price breaks through it. ## How to Trade the Fibonacci Trailing Stop? - **Line below price**: uptrend. Trail long positions on the line, which rises or holds but never gives ground. - **Line above price**: downtrend. The mirrored logic caps rallies and trails shorts. - **Line breached**: per the Trigger choice (close or wick), a breach flips the trend call, the tool's core reversal signal. - **Pattern alignment**: Fibonacci levels sitting in the lower half of the pattern support the uptrend case, the upper half the downtrend: structural confirmation of the current state. - **Shadows**: previous Fibonacci levels shown after a one-bar delay; large shadow blocks flag zones where support and resistance concentrate. A secondary, color-filled line built from minor swings runs alongside the main stop, and the whole design slots naturally among the [risk and exit tools](https://www.luxalgo.com/library/family/risk-exits/) whenever a rule-based way out of a trade is needed. ## Fibonacci Trailing Stop Settings - **L / R**: the pivot lookbacks that define swing highs and lows. - **Swing labels**: marks swings aligned with the active trend direction. - **Level**: which Fibonacci level the stop follows: presets from -0.5 to 0.618, or a custom value. - **Trigger**: whether a close or a wick counts as a breach, using highs in downtrends and lows in uptrends. - **Latest Fibonacci / Shadows**: display the current pattern's levels and keep prior ones as shadows; enabling shadows removes the color fill to keep the chart readable. ## Frequently Asked Questions ### What updates the stop line? New swings. Every fresh swing high or low can rebuild the Fibonacci pattern and move the chosen level, but the plotted stop only steps in the trend's direction, so updates tighten the trail rather than loosen it. ### How does it differ from a structure-based trailing stop? The [Market Structure Trailing Stop](https://www.luxalgo.com/library/indicator/market-structure-trailing-stop/) anchors its trail to market structure events, while this build trails a Fibonacci level of the latest swing pattern. Its distance scales with the swing's size, which suits traders already framing markets in Fibonacci terms. ### Is the Fibonacci Trailing Stop free to use? It is. Access is free via the LuxAlgo Library, and running it in Quant, our coding agent, takes one click from this page. You can also copy the source code from this page and run it anywhere Pine Script® runs. ## Related indicators - [Signals & Overlays](https://www.luxalgo.com/library/indicator/luxalgo-signals-overlays/) (Trailing Method Taxonomy): markdown at https://www.luxalgo.com/library/indicator/luxalgo-signals-overlays.md - [Neighboring Trailing Stop](https://www.luxalgo.com/library/indicator/neighboring-trailing-stop/) (Trailing Method Taxonomy): markdown at https://www.luxalgo.com/library/indicator/neighboring-trailing-stop.md - [Statistical Trailing Stop](https://www.luxalgo.com/library/indicator/statistical-trailing-stop/) (Trailing Method Taxonomy): markdown at https://www.luxalgo.com/library/indicator/statistical-trailing-stop.md - [FVG Trailing Stop](https://www.luxalgo.com/library/indicator/fvg-trailing-stop/) (Trailing Method Taxonomy): markdown at https://www.luxalgo.com/library/indicator/fvg-trailing-stop.md - [Market Structure Trailing Stop](https://www.luxalgo.com/library/indicator/market-structure-trailing-stop/) (Trailing Method Taxonomy): markdown at https://www.luxalgo.com/library/indicator/market-structure-trailing-stop.md - [Sigmoid Transition Trailing Stop](https://www.luxalgo.com/library/indicator/sigmoid-transition-trailing-stop/) (Trailing Method Taxonomy): markdown at https://www.luxalgo.com/library/indicator/sigmoid-transition-trailing-stop.md - [Fibonacci Toolkit](https://www.luxalgo.com/library/indicator/fibonacci-toolkit/) (Fib Retracement): markdown at https://www.luxalgo.com/library/indicator/fibonacci-toolkit.md - [Fibonacci Grid](https://www.luxalgo.com/library/indicator/fibonacci-grid/) (Fib Retracement): markdown at https://www.luxalgo.com/library/indicator/fibonacci-grid.md --- Source: https://www.luxalgo.com/library/indicator/fibonacci-trailing-stop/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/