The Channel Based Fibo Levels MT4 indicator plots channels based on a moving average. It forms the upper and lower channel lines using the 23.5%, 38.2%, 50% and 61.8% Fibo values of the moving average. As a result, forex traders can identify trend continuations and best oversold and overbought price levels to trade accordingly.
Features of Channel Based Fibo Levels MT4 Indicator
By default, the indicator uses a 100 period moving average. It plots a white upper and lower channel at 23.5% of Fibo value of the moving average, yellow upper and lower channel lines at 38.2%. Additionally, the orange lines indicate 50% of Fibo level and red lines indicate 61.8%.
If the price cuts through the channel lines it indicates the continuation of the current market trend. So, forex traders should continue to hold their positions and maximize the profit potential.
If price reaches the outer upper most bands and reverses a price rejection occurs, it indicates a reversal trading signal. Traders can enter a sell trade and target to book profits at a lower band. Similarly, traders can open buy positions at the rejection of a lower outer band.
Benefits of Channel Based Fibo Levels MT4 Indicator
Generally, forex traders construct channels using various methods for technical analysis. However, the application of Fibo levels makes this indicator strictly mathematical and eliminates trader bias and errors of a manually plotted channel.
Since channels provide a visual and easy oversold and overbought indication, it is suitable for new and advanced forex traders. The indicator works well in all intraday chart times as well as the daily, weekly and month charts. So, it is suitable for short and long-term forex traders.
Indicator Settings Description
BarsCount: Number of history bars to plot the indicator.
MAPeriod:, MAMethod:, MAPrice: Input for moving average calculation.
fontsize: Font size of Fibo levels.
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