Fibonacci retracement

The Fibonacci retracement indicator automatically plots key retracement levels based on the current market trend detected via market structure analysis. By identifying Breaks of Structure (BOS) and Changes of Character (CHoCH), the tool ensures Fibonacci levels are drawn from swing low to high in bullish trends and swing high to low in bearish trends.

Usage

The Usage of this tool centers on identifying potential entry points during price pullbacks within a confirmed trend. Traders can use the automated levels to spot "key" zones where price history suggests reactions are likely.

• Trend Alignment: The script only plots retracements that align with the current trend, reducing noise from counter-trend moves.
• Market Structure: Labels like 'BOS' and 'CHoCH' provide visual confirmation of trend continuation or reversals.
• Entry Zones: Focus on the 61.8% "Golden Ratio" for standard retracements or the 78.6% level for deeper corrections.

Details

This script utilizes a custom market structure library to determine the prevailing trend. Unlike standard manual Fibonacci tools, this indicator is dynamic; it recalculates the anchor points (swing highs and lows) automatically as the market forms new pivots. The calculation of levels follows standard financial mathematics, where levels like 23.6%, 38.2%, and 61.8% are derived from the Fibonacci sequence ratios, while the 50% level is included due to its historical significance in price action.

Settings

Market structure

• Pivot Length (Left/Right): Determines the number of bars required to identify a swing high or low.
• Show Pivots: Toggles the visibility of pivot labels on the chart.
• Font Size: Adjusts the text size for market structure labels.

Fibonacci retracement

• Trendline: Enables or disables the diagonal line connecting the swing points.
• Levels Line Style: Changes the appearance of the horizontal level lines (Solid, Dashed, Dotted).
• Extend Right: Extends the level lines indefinitely to the right side of the chart.
• Zone Settings (1-24): Allows users to enable/disable specific ratios, customize their values, and change their colors.
• Reverse: Flips the Fibonacci levels (useful for specific projection techniques).
• Prices/Levels: Toggles the display of price values and ratio values/percentages next to the lines.
• Labels Position: Sets label alignment to Left, Right, or "Adapt" (which automatically moves labels based on trend direction).

FAQ

How do I access the Fibonacci retracement indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

What does CHoCH+ signify? CHoCH+ indicates a "Change of Character Plus," which is a trend reversal signal accompanied by a failed swing, providing a more robust indication of a shift in market sentiment.

Can I customize the Fibonacci ratios? Yes, the settings menu includes 24 customizable slots where you can input specific decimal values to suit your trading strategy.