Auto Fibonacci Indicator for MT5
The Fibonacci ratios are a sequence of repeating ratios that repeat themselves in nature. However, it also applies to price movement patterns.
The Auto Fibonacci indicator is a tool that helps traders identify these ratios more easily.
What is Auto Fibonacci Indicator?
The Auto Fibonacci Indicator is a specialized technical indicator that identifies key price levels that can act as support or resistance levels based on Fibonacci retracement levels. These levels can be used as price points where traders can anticipate potential reversals and trade trend continuation settings.
How does the Auto Fibonacci indicator work?
The Auto Fibonacci indicator has a variable that the trader can change where this occurs n The number of periods during which the indicator will see the highest high or the lowest low for a specified number of periods. This indicator will then look at the direction of the last trend based on the current price's distance from the highest high or lowest low.
After identifying the trend direction, the highest high or the lowest low for n periods will be considered as swing high or swing low. The indicator then automatically draws a Fibonacci retracement tool that connects swing highs and swing lows depending on the direction of the trend.
This automatic Fibonacci indicator draws a retracement tool with levels 0, 23.6, 38.2, 50, 61.8, 100, 161.8 and 261.8.
Automatic Fibonacci Indicator for MT5
This indicator allows the trader to change the number of bars on which the indicator will identify the direction of the trend as well as the swing high and swing low. It is important for traders to verify that the point identified by the indicator is an actual swing high or swing low. Otherwise, we can adjust the number of bars in the Bars Back variable. Traders should also change the “High to Low” variable depending on the direction of the trend identified by the indicator.
How to use the Auto Fibonacci indicator for MT5
The Auto Fibonacci tool should be used in the same way as the Fibonacci retracement tool. Traders can use it to anticipate a pullback at the 38.2, 50, and 61.8 levels for better accuracy. Among the three, the ratio of 61.8 is considered the golden ratio.
Traders can wait until a reversal candlestick pattern appears around this level, signaling the end of the pullback phase. Traders can also place a limit entry order at the 50 or 61.8 level to enter the market at a better price. However, this will not be so accurate.
Buy trade settings
When to enter?
Auto-Fibonacci should draw a retracement tool that connects from swing low to swing high. Set the High to Low variable to false. Set a buy limit order at 61.8 and stop loss below 100.