Fibonacci Pivot Points

The Fibonacci Pivot Points indicator is a technical analysis tool that calculates support and resistance levels based on Fibonacci ratios applied to the previous day's price range. It provides traders with a framework for identifying potential turning points and trend continuation zones within the market.

Usage

The Fibonacci Pivot Points indicator can be used to identify key intraday levels where price action might stall or reverse. Traders typically look for the following:

• Support Levels (S1, S2, S3): These levels act as potential floors where buying interest may emerge. If the price approaches S1 or S2, traders might look for bullish reversal patterns.
• Resistance Levels (R1, R2, R3): These levels act as potential ceilings where selling pressure may increase. If the price approaches R1 or R2, traders might look for bearish reversal patterns.
• Pivot Point (PP): The central line serves as the primary trend filter. Generally, trading above the PP suggests a bullish bias for the day, while trading below it suggests a bearish bias.

Details

This script utilizes the classic Pivot Point calculation combined with Fibonacci retracement levels (0.382, 0.618, and 1.0). The levels are calculated using the previous day's High, Low, and Close prices:

• Pivot Point (PP): (High + Low + Close) / 3
• Resistance 1 (R1): PP + (Range * 0.382)
• Support 1 (S1): PP - (Range * 0.382)
• Resistance 2 (R2): PP + (Range * 0.618)
• Support 2 (S2): PP - (Range * 0.618)
• Resistance 3 (R3): PP + (Range * 1.0)
• Support 3 (S3): PP - (Range * 1.0)

By applying these specific ratios to the previous day's range, the indicator offers a more nuanced view of market structure compared to standard Floor Pivots.

Settings

As this specific implementation relies on daily data for calculation, the settings focus on visual output:

• R1, R2, R3: Toggles the visibility and color of the resistance levels.
• PP: Toggles the visibility and color of the central Pivot Point.
• S1, S2, S3: Toggles the visibility and color of the support levels.

FAQ

How do I use Fibonacci Pivot Points for entries?

Traders often use these levels in conjunction with candlesticks; for instance, a bullish engulfing candle at S1 might signal a long entry, while a rejection at R1 might signal a short entry.

On which timeframes does this work best?

While the levels are calculated from daily data, they are most effective when viewed on intraday charts such as the 5-minute, 15-minute, or 1-hour timeframes.

How can I access this tool?

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