Fibonacci Retracements & Trend Following Strategy

2023年5月1日

Hello! This code creates a Fibonacci retracement indicator and a trend-following strategy indicator. Trading signals and price reversal targets are also calculated. The overall structure of the code is quite clear and readable. The purpose of the code is to calculate Fibonacci retracement levels and a trend-following indicator, display price levels on a chart, calculate trading signals, and calculate price reversal targets.

In the first section, Fibonacci levels are determined. Four different Fibonacci levels are defined: 0.236, 0.382, 0.618, and 0.786. These levels will be used as retracement levels.

Next, a trend-following indicator is calculated. This indicator calculates the averages of high and low prices over a certain period. This indicator can be used to determine the direction of the trend.

Then, price levels are calculated. These levels are determined by calculating the difference between the highest and lowest prices of the trend-following indicator. These levels are used in the calculation of Fibonacci retracement levels.

Next, Fibonacci levels are calculated. These levels are calculated by multiplying price levels with Fibonacci retracement levels. These levels are displayed on the chart.

Trading signals and price reversal targets are calculated. This can be used to trade using a Fibonacci retracement strategy.

Finally, price reversal targets are displayed as circles on the chart.

Usage Guide: Fibonacci Retracement Indicator and Trend Following Strategy

This indicator is used for calculating Fibonacci retracement levels and a trend following indicator, displaying price levels on the chart, calculating trading signals, and determining price targets for reversals. It is important to understand how the indicator works and what type of trading signals it generates before trading with it.

1.)Fibonacci Retracement Levels
Fibonacci retracement levels are used to measure the retracement levels of a trend on the chart. These levels can be used where traders are looking for a reversal signal in the market.

This indicator uses four different Fibonacci levels, which are 0.236, 0.382, 0.618, and 0.786. These levels will be used as retracement levels.

2.)Trend Following Indicator
The trend following indicator calculates the averages of high and low prices over a specific period. This indicator can be used to determine the direction of the trend. While showing a rising trend, it helps the prices stay high, and when showing a falling trend, it can help the prices stay low.

3.)Price Levels
Price levels are determined by calculating the difference between the highest and lowest prices of the trend following indicator. These levels are used to calculate Fibonacci retracement levels.

4.)Trading Signals and Price Reversal Targets
Trading signals and price reversal targets can be used to trade using a Fibonacci retracement strategy. The indicator can buy at Fibonacci levels where prices are retreating in an uptrend, and sell at Fibonacci levels where prices are retreating in a downtrend.

Price reversal targets are shown on the chart in circles.

5.)Fibonacci Retracement Targets
The Fibonacci retracement targets are shown in circles on the chart. These target price levels are calculated by applying Fibonacci retracement levels to the high and low price ranges. These levels can help determine buy or sell signals.

6.)Buy and Sell Signals
The most important feature of the indicator is to determine buy and sell signals. A buy signal is given when the trend-following indicator falls below one of the Fibonacci retracement levels and the price drops below it. A sell signal is given when the trend-following indicator rises and the price goes above one of the Fibonacci retracement levels.

7.)Target Price Levels
Using the retracement levels can be used to determine potential target price levels. Target price levels are determined based on Fibonacci retracement levels and positions can be closed when these levels are reached.

8.)Examples of Using the Indicator:

a) Buy Signal
If the trend-following indicator drops below the 0.618 Fibonacci retracement level and the price falls below it, a buy signal can be given. The target price level can be between the 0.382 and 0.236 Fibonacci retracement levels.

b) Sell Signal
If the trend-following indicator rises and the price goes above the 0.236 Fibonacci retracement level, a sell signal can be given. The target price level can be between the 0.382 and 0.618 Fibonacci retracement levels.

c) Target Price Levels
When a position is opened, target price levels can be determined based on Fibonacci retracement levels. For example, when opening a buy position, the target price level can be between the 0.382 and 0.236 Fibonacci retracement levels.

The use of the indicator can be made more effective by using it together with other technical analysis tools. In addition, practical experimentation with the use of the indicator in different scenarios can help understand how the indicator works.