Fibonacci Bands [BigBeluga]

kemarin

The Fibonacci Band indicator is a powerful tool for identifying potential support, resistance, and mean reversion zones based on Fibonacci ratios. It overlays three sets of Fibonacci ratio bands (38.2%, 61.8%, and 100%) around a central trend line, dynamically adapting to price movements. This structure enables traders to track trends, visualize potential liquidity sweep areas, and spot reversal points for strategic entries and exits.



🔵 KEY FEATURES & USAGE

• Fibonacci Bands for Support & Resistance:
  The Fibonacci Band indicator applies three key Fibonacci ratios (38.2%, 61.8%, and 100%) to construct dynamic bands around a smoothed price. These levels often act as critical support and resistance areas, marked with labels displaying the percentage and corresponding price. The 100% band level is especially crucial, signaling potential liquidity sweep zones and reversal points.
  
• Mean Reversion Signals at 100% Bands:
  When price moves above or below the 100% band, the indicator generates mean reversion signals.
  
• Trend Detection with Midline:
  The central line acts as a trend-following tool: when solid, it indicates an uptrend, while a dashed line signals a downtrend. This adaptive midline helps traders assess the prevailing market direction while keeping the chart clean and intuitive.
  
• Extended Price Projections:
  All Fibonacci bands extend to future bars (default 30) to project potential price levels, providing a forward-looking perspective on where price may encounter support or resistance. This feature helps traders anticipate market structure in advance and set targets accordingly.
  
• Liquidity Sweep:
  --
  -Liquidity Sweep at Previous Lows:
  The price action moves below a previous low, capturing sell-side liquidity (stop-losses from long positions or entries for breakout traders).
  The wick suggests that the price quickly reversed, leaving a failed breakout below support.
  This is a classic liquidity grab, often indicating a bullish reversal.
  
  -Liquidity Sweep at Previous Highs:
  The price spikes above a prior high, sweeping buy-side liquidity (stop-losses from short positions or breakout entries).
  The wick signifies rejection, suggesting a failed breakout above resistance.
  This is a bearish liquidity sweep, often followed by a mean reversion or a downward move.
  
• Display Customization:
  To declutter the chart, traders can choose to hide Fibonacci levels and only display overbought/oversold zones along with the trend-following midline and mean reversion signals. This option enables a clearer focus on key reversal areas without additional distractions.
  

🔵 CUSTOMIZATION

• Period Length: Adjust the length of the smoothed moving average for more reactive or smoother bands.
  
• Channel Width: Customize the width of the Fibonacci channel.
  
• Fibonacci Ratios: Customize the Fibonacci ratios to reflect personal preference or unique market behaviors.
  
• Future Projection Extension: Set the number of bars to extend Fibonacci bands, allowing flexibility in projecting price levels.
  
• Hide Fibonacci Levels: Toggle the visibility of Fibonacci levels for a cleaner chart focused on overbought/oversold regions and midline trend signals.
  
• Liquidity Sweep: Toggle the visibility of Liquidity Sweep points
  

The Fibonacci Band indicator provides traders with an advanced framework for analyzing market structure, liquidity sweeps, and trend reversals. By integrating Fibonacci-based levels with trend detection and mean reversion signals, this tool offers a robust approach to navigating dynamic price action and finding high-probability trading opportunities.