Fibonacci Retracement is an indicator that was
developed by Leonardo Fibonacci an Italian mathematician who lived from 1170 -
1250. He made some interesting discoveries during his time. He found out the
belly button is a retracement of 61.8% from the measurement head and feet. The
elbow is a retracement of 61% of total measurement of arm. The Fibonacci
numbers or Fibonacci sequence are widely observed in nature line number of
branches and leaves in a tree, distribution of petals in flowers and seeds.
The Fibonacci sequence is a set of numbers that
starts with a one or a zero. The proceeding number is equal to the sum of the
preceding two numbers.
Example : 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55,
89…
In share markets, the term Fibonacci retracement
is widely used when it comes to charting. It has been observed that the
movement of price has some resemblance with Fibonacci sequence. In share
market charts, whenever there is a correction or pull back the retracement
levels of 38.2%, 61.8%, 78.6% are seen as
possible levels. The 50% retracement level also has some special relevance. For example if the trend is up the price may
correct to find the 38.2% or 50% levels and then revert back to the original
uptrend. The same can be said in a downtrend market too. Therefore trading
opportunities can be found if these levels are properly utilized.
Today I am posting an AFL indicator that will
react anywhere it is clicked. It can show the Fibonacci levels at any given
point. This is particularly useful for students of technical analysis study
purpose. This is not very complicated. The chart displayed is the Nifty’s
course last week.
/////////////////////////////////////The Code is
posted below///////////////////////////////////
_SECTION_BEGIN("Background");SetChartOptions(0,chartShowArrows|chartShowDates);
SetChartBkColor(ParamColor("Outer panel",colorBlack)); // color of outer border
SetChartBkGradientFill( ParamColor("Inner panel
upper",colorBlack),ParamColor("Inner panel lower",colorBlack));
tchoice=Param("Title Selection ",2,1,2,1);
Plot(C, "", IIf(O>=C, colorOrange, colorGreen), ParamStyle("Price
Style",styleBar,maskPrice));
_SECTION_BEGIN("Fib Retracements");
fibs = ParamToggle("Plot Fibs","Off|On",1);
pctH = Param ("Pivot Hi %", 0.325,0.001,2.0,0.002);
HiLB = Param ("Hi LookBack",1,1,BarCount-1,1);
pctL = Param ("Pivot Lo %", 0.325,0.001,2.0,0.002);
LoLB = Param ("Lo LookBack",1,1,BarCount-1,1);
Back = Param ("Extend Left = 2",1,1,500,1);
Fwd = Param("Plot Forward", 0, 0, 500, 1);
text = ParamToggle("Plot Text","Off|On",1);
hts = Param ("Text Shift", -33.5,-50,50,0.10);
style =ParamStyle("Line Style",styleLine,styleNoLabel);
x = BarIndex();
pRp = PeakBars( H, pctH, 1) == 0;
yRp0 = SelectedValue(ValueWhen( pRp, H, HiLB));
xRp0 = SelectedValue(ValueWhen( pRp, x, HiLB));
pSp = TroughBars( L, pctL, 1) == 0;
ySp0 = SelectedValue(ValueWhen( pSp, L, LoLB));
xSp0 = SelectedValue(ValueWhen( pSp, x, LoLB));
Delta = yRp0 - ySp0;
function fib(ret)
{
retval = (Delta * ret);
Fibval = IIf(ret < 1.0
AND xSp0 < xRp0, yRp0 - retval, IIf(ret < 1.0
AND xSp0 > xRp0, ySp0 + retval,IIf(ret > 1.0
AND xSp0 < xRp0, yRp0 - retval, IIf(ret > 1.0
AND xSp0 > xRp0, ySp0 + retval, Null))));
return FibVal;
}
x0 = Min(xSp0,xRp0)-Back;
x1 = (BarCount -1);
r236 = fib(0.236); r236I = LastValue (r236,1);
r382 = fib(0.382); r382I = LastValue (r382,1);
r050 = fib(0.50); r050I = LastValue (r050,1);
r618 = fib(0.618); r618I = LastValue (r618,1);
r786 = fib(0.786); r786I = LastValue (r786,1);
e127 = fib(1.27); e127I = LastValue (e127,1);
e162 = fib(1.62); e162I = LastValue (e162,1);
e200 = fib(2.00); e200I = LastValue (e200,1);
e262 = fib(2.62); e262I = LastValue (e262,1);
e424 = fib(4.24); e424I = LastValue (e424,1);
p00 = IIf(xSp0 > xRp0,ySp0,yRp0); p00I = LastValue (p00,1);
p100 = IIf(xSp0 < xRp0,ySp0,yRp0); p100I = LastValue (p100,1);
color00 =IIf(xSp0 > xRp0,colorLime,colorRed);
color100 =IIf(xSp0 < xRp0,colorLime,colorRed);
numbars = LastValue(Cum(Status("barvisible")));
fraction= IIf(StrRight(Name(),3) == "", 3.2, 3.2);
if(fibs==1)
{
Plot(LineArray(xRp0-Fwd,yRp0,x1,yRp0,Back),"PR",32,8|styleNoRescale,Null,Null,Fwd);
Plot(LineArray(xSp0-Fwd,ySp0,x1,ySp0,Back),"PS",27,8|styleNoRescale,Null,Null,Fwd);
Plot(LineArray(x0-Fwd,r236,x1,r236,Back),"",45,style|styleNoRescale,Null,Null,Fwd);
Plot(LineArray(x0-Fwd,r382,x1,r382,Back),"",44,style|styleNoRescale,Null,Null,Fwd);
Plot(LineArray(x0-Fwd,r050,x1,r050,Back),"",41,style|styleNoRescale,Null,Null,Fwd);
Plot(LineArray(x0-Fwd,r618,x1,r618,Back),"",43,style|styleNoRescale,Null,Null,Fwd);
Plot(LineArray(x0-Fwd,r786,x1,r786,Back),"",42,style|styleNoRescale,Null,Null,Fwd);
Plot(LineArray(x0-Fwd,e127,x1,e127,Back),"e127",47,style|styleNoRescale,Null,Null,Fwd);
Plot(LineArray(x0-Fwd,e162,x1,e162,Back),"e162",47,style|styleNoRescale,Null,Null,Fwd);
Plot(LineArray(x0-Fwd,e200,x1,e200,Back),"p200",47,style|styleNoRescale,Null,Null,Fwd);
Plot(LineArray(x0-Fwd,e262,x1,e262,Back),"p262",47,style|styleNoRescale,Null,Null,Fwd);
Plot(LineArray(x0-Fwd,e424,x1,e424,Back),"p424",25,style|styleNoRescale,Null,Null,Fwd);
}
if(text==1)
{
PlotText(" 0% = " + WriteVal(p00,fraction),
LastValue(BarIndex())-(numbars/hts), p00I + 0.05, color00);
PlotText("23% = " + WriteVal(r236,fraction),
LastValue(BarIndex())-(numbars/hts), r236I + 0.05, 45);
PlotText("38% = " + WriteVal(r382,fraction),
LastValue(BarIndex())-(numbars/hts), r382I + 0.05, 44);
PlotText("50% = " + WriteVal(r050,fraction),
LastValue(BarIndex())-(numbars/hts), r050I + 0.05, 41);
PlotText("62% = " + WriteVal(r618,fraction),
LastValue(BarIndex())-(numbars/hts), r618I + 0.05, 43);
PlotText("78% = " + WriteVal(r786,fraction),
LastValue(BarIndex())-(numbars/hts), r786I + 0.05, 42);
PlotText("100% = " + WriteVal(p100,fraction),
LastValue(BarIndex())-(numbars/hts),p100I + 0.05, color100);
PlotText("127% = " + WriteVal(e127,fraction),
LastValue(BarIndex())-(numbars/hts),e127I + 0.05, 47);
PlotText("162% = " + WriteVal(e162,fraction),
LastValue(BarIndex())-(numbars/hts),e162I + 0.05, 47);
PlotText("200% = " + WriteVal(e200,fraction),
LastValue(BarIndex())-(numbars/hts),e200I + 0.05, 47);
PlotText("262% = " + WriteVal(e262,fraction),
LastValue(BarIndex())-(numbars/hts),e262I + 0.05, 47);
PlotText("424% = " + WriteVal(e424,fraction),
LastValue(BarIndex())-(numbars/hts),e424I + 0.05, 25);
}
_SECTION_END();
if (tchoice==1 )
{
_N(Title = EncodeColor(colorWhite)+StrFormat(" {{NAME}} - {{INTERVAL}}
{{Date}} Open: %g, High: %g, Low: %g, Close: %g
{{VALUES}}",O, H, L, C, SelectedValue( ROC( C, 1 ) ) ));
}
if (tchoice==2 )
{
Title = EncodeColor(colorWhite)+ Date() + " Tick = " + EncodeColor(5) +Interval()+
EncodeColor(colorWhite) + " Open = " + EncodeColor(colorWhite) + O +
EncodeColor(colorWhite) + " High = " + EncodeColor(5) + H +
EncodeColor(colorWhite) + " Low = " + EncodeColor(colorRed) + L +
EncodeColor(colorWhite) + " Close = " + EncodeColor(colorWhite) + C + "\n"+
EncodeColor( colorWhite) +"_______________"+"\n"+
EncodeColor( colorWhite) + "424% = " + EncodeColor(25)+ e424 + " " +"\n"+
EncodeColor( colorWhite) + "262% = " + EncodeColor(47)+ e262 + " " +"\n"+
EncodeColor( colorWhite) + "200% = " + EncodeColor(47)+ e200 + " " +"\n"+
EncodeColor( colorWhite) + "162% = " + EncodeColor(47)+ e162 + " " +"\n"+
EncodeColor( colorWhite) + "127% = " + EncodeColor(47)+ e127 + " " +"\n"+
EncodeColor( colorYellow) + " Res = " + EncodeColor(32)+ p100 + " "+"\n"+
EncodeColor( colorWhite) + " 78% = " + EncodeColor(42)+ r786 + " " +"\n"+
EncodeColor( colorWhite) + " 62% = " + EncodeColor(43)+ r618 + " "+"\n"+
EncodeColor( colorWhite) + " 50% = " + EncodeColor(41)+ r050 + " "+"\n"+
EncodeColor( colorWhite) + " 38% = " + EncodeColor(44)+ r382 + " "+"\n"+
EncodeColor( colorWhite) + " 23% = " + EncodeColor(45)+ r236+ " " +"\n"+
EncodeColor( colorYellow) + " Sup = " + EncodeColor(34)+ p00 + " " ;}
GraphXSpace=5;
///////////////////////////////// End of
code/////////////////
Best of luck
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