Gaussian Fibonacci Fan

The Gaussian Fibonacci Fan indicator provides a multi-layered visualization of market trends by plotting ten Gaussian-smoothed moving averages based on Fibonacci sequences to help traders identify trend direction, momentum, and potential support/resistance zones.

Usage

The Gaussian Fibonacci Fan can be used to gauge trend strength and direction through the expansion or contraction of its moving average lines.

• Trend Identification: When the shorter-period (fast) lines are above the longer-period (slow) lines and the fan is expanding, a strong bullish trend is indicated. Conversely, when shorter-period lines are below longer-period lines, a bearish trend is present.
• Mean Reversion: Traders can look for price interactions with the middle or outer bands of the fan to identify potential areas where the price might revert or find support/resistance.
• Crossovers: The interaction between the fastest line (Length 1) and the slowest line (Length 10) can be used as a signal for potential trend shifts.

Details

The indicator utilizes a Gaussian filter calculation to smooth price data. Unlike simple moving averages, the Gaussian filter aims to reduce lag while providing a higher degree of smoothness. The default periods for the first nine lines follow the Fibonacci sequence (8, 13, 21, 34, 55, 89, 144, 233, 377), with a tenth line typically set to a common anchor like 200 to provide a comprehensive view of market cycles across different time horizons.

Settings

• Source: Determines the price data used for the calculations (e.g., Close, Open, High, Low).
• Length 1 - 9: Individual period settings for the first nine Gaussian moving averages, defaulting to Fibonacci numbers.
• Length 10: The period setting for the tenth Gaussian moving average, providing a long-term trend baseline.

FAQ

How do I use the Gaussian Fibonacci Fan for entries?

Users typically look for "fan-outs" where the lines separate clearly in a specific direction, or wait for price to pull back into the fan during a strong trend to find entry points.

Can I change the smoothing lengths?

Yes, all ten lengths are fully customizable in the settings menu to fit different trading styles or asset classes.

How do I access the Gaussian Fibonacci Fan?

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