This MultiCharts indicator is able draw the Fibonacci Fan automatically on chart based on the input range of bars.
The lines of a Fibonacci fan used Fibonacci ratios determined by the Fibonacci series, typically 23.6 percent, 38.2 percent, 50 percent, 61.8 percent and 80.9 percent. They can be used to estimate support and resistance levels.
Fibonacci fan is a practical technique that uses Fibonacci ratios to draw out levels of support and resistance, see chart below as an example.
As chart below shows, the fan lines can be either upwards (rising Fibonacci Fan) or downwards (Falling Fibonacci Fan), and the lines are drawn using Fibonacci ratios, typically 23.6%, 38.2%, 50%, 61.8% and 80.9%.
How does it work?
It helps to identify potential support/resistance as price moves towards to or along the Fibonacci Fan lines.
- Range, it's the number of bars used to detect the highest and lowest price. The default value is 300 it means the indicator will plot the Fibonacci Fan based on the price range of last 300 bars.
- If you want to use different ratios other than the default ones, you can change them from input Level1 to Level4.
- You can change the color of each level line, the Line1 is the bottom one and Line6 is the top one. Please use the following available colors: Black Blue Cyan DarkBlue DarkBrown DarkCyan DarkGray DarkGreen DarkMagenta DarkRed DarkYellow Green LightGray Magenta Red White Yellow
- The highest and lowest level are auto detected and can't be changed.
- Line style: you can enter from 1 to 5.
1 is Solid like this: ______________________
2 is Dashed - - - - - - - - - - - - - - - - - - -
3 is Dashed ............................................
4 is Dashed2 __ _ __ _ __ _ __ _ __ _ __
5 is Dashed3 ___ _ _ ___ _ _ ___ _ _ ___
As circled in red in chart below, price fails to break out 38.2% fan line twice, which make it a potential resistance level.
As circled in red in chart below, price bounces back after it moved close to 61.8% in three occasions, which made it a good support level in the upward trend. However, this is also a classic example of why Fibonacci Fan indicator should not be used alone to predict future reversals, after the price done flirting with 61.8% for the third time, it traded right through it and only stopped at next fan line 80.9%.
In chart below, price moved along 50% fan line for an extend period of time, which shows demand is weakening and market is looking for directions either way. In times like this, some traders prefer to stay on the sidelines until definitive signal is emerged and confirmed.
After witnessed how powerful the Fibonacci fan can be, purchasing this Multicharts indicator will save you time and provide a great deal of convenience by drawing the Fibonacci Fan ATOMICALLY based on the input rang of bars.
Auto Fibonacci fan indicator for MultiCharts realtime playback
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