Just as the name goes, this indicator combines Fibonacci indicator and the trend lines. It is auto; meaning that the trader doesn’t have to go through the hustle of identifying the moments to place the Fibonacci and also trying to identify the perfect place to start drawing your trend lines. The indicator draws everything for you automatically when the chance arises giving the trader an easy time during trading.
It can either be used with its template or without (inserted directly to the template that the trader is using).
Fig.1. The Auto Fibo Trend indicator template explained.
Fig.2. The Auto Fibo Trend indicator used without its template.
All that said and done, let’s get to how the indicator is programmed to perform! The indicator indicates the Fibonacci levels for the trader and displays three trend lines. The trend lines are the yellow lines that appears on the trading chart.
Before placing anything on the chart, the indicator first identifies the current market trend and from there it can place all the other things. The trend is indicates by the trend lines together with the channel that is made by the blue lines. Actually, everything else happens within this band. The Fibonacci is taken from the bottom to the top of the band for the downtrend and from the top to bottom for the uptrend. The trend line are designed to originate from the starting point of the Fibonacci.
The trend line mainly shows the previous trend of the market from which it is retracing.
Just a short explanation of using the Fibonacci indicator which is the main thing to understand after getting to know the trend of the market which is easily given to you. First, the Fibonacci gives the retracement levels, which shows the levels to which the market prices would reach if there is a chance of the market retracing. This levels are shown in percentages. The main and most realistic retracement levels are the 38.2, 50 and the 61.8. When the market goes beyond the 61.8 level, that market may have just changed its trend and the trader should wait to see whether I reaches the 100% level. The Auto Fibo Trend indicator mainly concentrates on the 38.2, 50 and the 61.8 levels and uses these three to even come up with the trend lines. The retracement levels are indicated in yellow alongside each of their respective trend lines.
Things to note:
- The Auto Fibo Trend indicator works to takes advantage of the reversal behaviors of the market. This makes it a great tool for the intraday and long term traders who leaves their trades to run for quite some time.
- Trading should be minimized to between 0 and 61.8 % of the Fibonacci retracement levels.
How to place orders using the Auto Fibo Trend indicator.
The trader should simply place a trade once a Fibonacci is drawn. The order placing has to be done within the 0 and 23.6 level. If you open the market and the market levels are passed this levels, the avoid trading. The order should then be closed when the market prices hits the 61.8 level.
If the Fibonacci levels starts from top to bottom then the trader definitely should be placing sell trades and vice versa.
Below are some figures showing how to place the orders.
Fig.3. Placing a sell using the Auto Fibo Trend indicator.
Fig.4. Placing a buy order using the Auto Fibo Trend indicator.
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