A Fibonacci Speed Resistance Fan consists of a drawn between two extreme points - a trough and opposing peak or a peak and opposing trough - on which a set of sequential speed resistance lines are drawn above (which represents time) and below (which represents price). These lines are drawn based on time/price percentages of the distance between the beginning and the end of the .
Speed resistance lines not only help to measure trend corrections but also measure the speed of a trend (the rate at which a trendline ascends or descends)
Traders can use the lines of the Fibonacci Speed and Resistance Fan to predict key points of resistance or support, at which they might expect price trends to reverse. Once a trader identifies patterns within a chart, they can use those patterns to predict future price movements and future levels of . Traders use the predictions to time their trades. Key levels tend to occur frequently at the 61.8-percent level on both uptrends and downtrends.
Please check for further details in the education post that I will share shortly after this publication :
Nobody appears to know whether Fibonacci tools work because markets exhibit some form of natural pattern or because many investors use Fibonacci ratios to predict price movements, making them a self-fulfilling prophecy.
█ Study OPTIONS
Auto Fibonacci Speed and Resistance Fan, the main aim of the study
- threshold can be adjusted via “Deviation” and “Depth” input options
- Historical Fans option will allow plotting of Speed and Resistance Fans on previous high/lows
- Ability to set ALERTs for the Speed and Resistance Levels
- Price Grid Lines if extended it will result with Fib Retracement levels
- All lines, line levels are customizable, default values are set exactly to the same with the available Fib Speed and Resistance Fan drawing tool
Zig Zag – Derived from build-in Auto Fib Retracement with some customization options.
Example Usages :
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Assuming the similarity between Gann Fans and Fibonacci Speed and Resistance Fans I have added an option to draw second instance of Fibonacci Speed and Resistance Fans with the same approach as described in @Mayfair_Ventures’s editorial pick featured education post Gann Fan Tutorial Basics. I will strongly suggest to check this and many other high valuable posts under Mayfair_Ventures profile and thanks to him who also supported this update
Fibonacci Speed and Resistance Fans vs. Gann Fans
Gann fans are another form of technical analysis based on the idea that the market is geometric and cyclical in nature. A Gann fan consists of a series of trend lines called Gann angles.
Instead of relying on Fibonacci's golden ratio of 1.618 (where the lines are drawn based on time/price percentages of the distance between the beginning and the end of the trend line), Gann believed the 45-degree angle (geometric angles of time versus price) to be most important. The Gann fan subsequently draws additional angles at 82.5, 75, 71.25, 63.75, 26.25, 18.75, 15, and 7.5 degrees. These angles are superimposed over a price chart to show potential support and resistance levels
UniColor option added to quickly change the colors of all lines of a fib speed and resistance fan instance
Ps: all the option except unicolor option are common for both fib speed and resistance fan instances, whatever changes made in the options will applied to both. Alerts are supported with both fib speed and resistance fan instances
Added short description to frequently asked input options “Deviation” and “Depth”
Now we can plot Time Levels into future thanks to new pine feature. With the new feature we can now use offsets of up to 500 bars into the future when using xloc.bar_index to position lines, labels, and boxes.
added backgroud coloring option, thanks to new pine feature
- imporved label customizations
- added alert whe new zigzag is detected or updated
- converted to Pine v5