Auto Fibonacci

The Auto Fibonacci indicator automatically plots Fibonacci retracement and extension levels based on dynamic price swings and volatility triggers. By utilizing a combination of stochastic readings, Bollinger Band deviations, and lookback periods, it identifies significant highs and lows to provide a comprehensive framework for identifying support and resistance zones.

Usage

The Usage section focuses on interpreting the automated levels generated by the script. Traders can use these levels to identify potential reversal points or trend continuation targets.

• Retracement Levels: The core area between the high and low (0 to 1) provides standard retracement levels (0.236, 0.382, 0.5, 0.618, and 0.786).
• Extensions: The indicator can plot up to four levels of extensions (1.618, 2.618, 3.618, and 4.618) both above and below the main range.
• Dynamic Updating: The script updates its anchor points when specific conditions are met, such as price reaching extreme stochastic levels or breaking out of volatility bands defined by the user settings.
• Visual Analysis: The background fill helps visualize the current trading range, while step-lines provide clear price targets that do not repaint once the bar closes.

Details

The script calculates anchor points using a multi-trigger logic:

1. Time-based: Resets if the high/low hasn't changed within a specific multiple of the lookback length.
2. Price-based: Resets if price exceeds the current extension limits.
3. Momentum/Volatility: Resets if the Stochastic oscillator hits 0 or 100, or if price closes outside of a calculated Bollinger Band envelope.

The calculation uses a base lookback length multiplied by a factor determined by the highest enabled extension to ensure the levels remain relevant to current market volatility.

Settings

• Length: The lookback period used for finding the highest highs and lowest lows, as well as for Stochastic and Bollinger Band calculations.
• Fill: Toggles the background color fill between the main Fibonacci retracement levels.
• Extension 1-4: Toggles the display of the four major Fibonacci extension levels (1.618, 2.618, 3.618, 4.618).
• Fibs 1-4: Toggles the display of intermediate Fibonacci levels within each respective extension zone.

FAQ

How do I use the Auto Fibonacci tool?

The indicator is best used to identify key price levels where the market might pause or reverse. Look for confluence between price action and the automated retracement or extension lines.

Can I change the sensitivity of the level resets?

Yes, by adjusting the "Length" setting, you can make the indicator more reactive to recent price changes (lower value) or more focused on long-term trends (higher value).

How can I access this indicator?

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