TIL Auto Fibonacci Indicator
- Indicators
- Viktor Macariola
- Version: 1.1
- Updated: 21 November 2021
- Activations: 20
Fibonacci retracement is one of the most reliable and used technical analysis tools for trading. It uses the so called “golden ratio” to predict certain levels of support (price movement reverses from downward to upward) and resistance (price movement reverses from upward to downward) which is a mathematical pattern seen through out nature and even the universe. Because so many traders make use of this trading strategy and watch these price levels, more often than not the Fibonacci levels become a self-fulfilling prophecy.
The MetaTrader 4 platform in particular provides a Fibonacci retracement tool which allows the user to draw one on the chart. How do you plot this on the chart though? One of the ways of plotting Fibonacci retracement (and probably the most common method) is by finding the highest high and lowest low within a period or a group of candlestick bars and drawing the Fibonacci retracement using these two price levels (highest high and lowest low) as its height.
Of course, there are many indicators out there that makes this easier for the MT4 user by automatically drawing Fibonacci retracement on a chart. The TIL Auto Fibonacci Indicator does just that and more… MUCH more.
Trading Indicator Lab’s Auto Fibonacci indicator takes it to a whole new level by adding what we like to call the Fulcrum Line. It is shown as an Orange Red line in the same level as the Fibonacci Retracement’s 100 level. The indicator analyzes a certain length (default is 150 bars) to find the price level with the highest concentration of activity or where price has been accepted mostly. As the name suggests, this special price level serves as the fulcrum from which price pivots. Simply put – price is attracted to it. If price is currently above the Fulcrum Line, it is more likely to go down. Likewise, if price is currently below the Fulcrum Line, it is more likely to go up.
Furthermore, the Fulcrum Line is where the indicator starts to draw the MT4 Fibonacci Retracement and where it ends depends whether the current price is above or below the Fulcrum Line. If the current price is above the Fulcrum Line, the Fibonacci retracement’s zero line is above the highest high of the period. If the current price is below the Fulcrum Line, the Fibonacci retracement’s zero line is below the lowest low of the period. You can however customize this to your preference by changing the Zero Line Position setting.
How to use
The TIL Auto Fibonacci Indicator i very easy to use.
- Attach the TIL Auto Fibonacci Indicator to your chart.
- Find the Fulcrum Line (the orange red colored line).
- If the current price is below the Fulcrum Line…
- The price will most likely be pulled up towards the Fulcrum Line.
- Fibonacci Levels will serve more as SUPPORT than resistance lines. This means that price will bounce up against the Fib levels as it approaches it.
- If the current price is above the Fulcrum Line…
- The price will most likely be pulled down towards the Fulcrum Line.
- Fibonacci levels will serve more as RESISTANCE than support lines, This means that price will bounce down against the Fib levels as it approaches it.
Inputs
- Period – This is the number of bars that will be enclosed in with Fibonacci Retracement. Default is 150 bars.
- Zero Line Position – This determines the placement of the 0 line of the Fibonacci Retracement – either at the TOP (on top of the highest high) or at the BOTTOM (below the lowest low). This setting is set to AUTO by default. When set to AUTO, the indicator automatically places the zero line at the top when the current price is above the Fulcrum Line and vice versa.
- Fibonacci Line Color – This sets the color of the Fibonacci Retracement. The default is Plum.
- Fulcrum Line Color – This sets the color of the Fulcrum Line. The default is Orange Red.
