The Fibonacci Channel Pro Indicator - TradeStation · The Fibonacci Channel Pro Indicator ... The addition of Automatic Trend and Target Lines makes the Fibonacci Channel Indicator

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The Fibonacci Channel Pro Indicator

Table of Contents

1. What’s New In this Release 2

2. The Fibonacci Channel Indicator Overview 3

3. Using the Fibonacci Channel Indicator without Target Lines 4

4. Using the Fibonacci Channel Indicator with Target Lines 8

5. Alerts 10

6. Using the T-Bars Paint Study 12

6. Inputs Formatting 13

7. Policy 16



1) What is new in Version 4

Thank you for making this indicator one of the most popular in the Strategy Network. We are excited

about the new additions to the indicator to enhance its performance,

1 .1 Addition of Automatic Trend and Target Lines

The addition of Automatic Trend and Target Lines makes the Fibonacci Channel Indicator a very robust

trading approach to any market. The Fibonacci Channel Indicator gives excellent signals for entering into

a trend, the target lines provides a guide for exiting a trade. It also serves to indicate market direction

and possible stop positions. See section 4 for usage reference.

1.2 Trend Marker can now be used with Momentum and Range Bars

The Trend Marker feature on the Fibonacci Channel Indicator can now be used with Momentum and

Range bars and.

1.3 Trend Marker Parameters Adjustment for Long Term Time Frame Charts

The Trend Marker Parameters were adjusted on Weekly and Monthly charts to minimize lag in the event

of a market crash. By using Target lines this problem is completely eliminated.

1.4 Bar Paint Studies Have Been Merged Into a Single Study.

A single price patter recognition study is now included with the indicator.

1.5 Privacy Policy

Please refer to the policy statement at the end of this document.



2) The Fibonacci Channel Indicator Overview

The Fibonacci Channel is a trend following and momentum indicator designed as an alternative to

the traditional moving average indicators. The great advantage over the traditional moving

average is that the stream indicator is time frame independent. A 200 day period moving average

on a daily chart, for example, is probably of little use on a monthly chart. This indicator is fully

time frame independent; there is no need to make adjustments based on interval. The indicator is

made of three components: The Fibonacci Stream, The Fibonacci Stream Average, and an optional

Trend marker. The indicator is in essence a dynamic Fibonacci Price Retracement Level constantly

adjusting to market movements and shown as a stream. Entry signals are clear with support and

resistance levels built into the stream line.



3) Using the Fibonacci Chanel without Target Lines: General Guidelines

3.1 Indicator is Bullish: Fibonacci Stream and Stream Average are above Trend Marker

A

C

B

Fibonacci Stream

Stream Average

Trend Marker

Apple Computer Inc. (AAPL) Daily Chart



Long Entry: Stream and Stream Average are above Trend Marker. Stream Average crosses above the

Stream. Alternatively, if you are using the paint bar studies enter long when the bar col or switches to

green from red and the overall condition is bullish.

Exit Area or Trend Resume Reentry: Stream and Stream Average are above Trend Marker. Stream

Average crosses Below the Stream. Alternatively, if you are using the paint bar studies enter long when

the bar color switches to green from red and the overall condition is bullish.

Exit Area or Wait for Trend to Resume: Stream and Stream Average are above Trend Marker, Stream

Average still Above the Stream but price has closed below it. Alternatively, if you are using any of the

paint bar studies exit when color has switched from green to red .

The above guidelines are the most general only, many other conditions can be established by using the

indicator frequently. Flat or ranging markets can lead to false signals, always use risk control when

trading.

B

C

A



3.2 Indicator is Bearish: Fibonacci Str eam and Stream Average are Below Trend

Marker

Fibonacci Stream

Stream Average

Trend Marker

A

C

B

Chipotle Inc. (CMG) 60 minutes Chart



Warning Signal: Stream and Stream Average are above Trend Marker. Stream Average crosses below

the Stream. Alternatively, if you are any of the paint bar studies a warning is in place when the bar

colors switches to red from green and the overall condition is bullish.

Early Short Entry Point: Stream and Stream Average are above Trend Marker, Stream Average is

below the Stream and price closes below the Trend Marker.

Short Entry point: Stream and Stream Average are Below Trend Marker, prices continue to close

below the Trend Marker. In this chart the conditions remain bearish.

The above guidelines are the most general only; many other conditions can be established by using the

indicator frequently. Flat or ranging markets can lead to false signals, always use risk control when

trading.

B

C

A



4) Using the Fibonacci Chanel with Target Lines: General Guidelines

Apple Computer Daily Chart

The usage of the target lines is illustrated in an Apple Computer daily bar chart; T-Bars were also used in

this example. The calculation is made automatically based on the number of bars you have displayed on

your chart. The center line is the trend line and indicates direction. The upper targets are U1 and U2 and

the lower targets are designated L1 and L2. The trend line and targets U1 and L1 have been already

optimized; the outer targets U2 and L2 are adjustable via the input menu when you format the

indicator. I recommend using a Max Target Ratio between 0.4 and 0.55 for the outer target lines, 0.5

was used in the illustration. The trades in the system are obvious from the picture:



Long Entry: The trend is up and prices are below the trend line . The Stream

Average is above the Stream, the Stream is above the Trend Marker. Enter long with a

stop at the Stream.

Long Early Exit : Prices are now above the U1 target line and it is good time for a safe and profitable

exit.

Long Exit : Prices have almost reached the upper target level U2 , the market might

be overbought. This a more precise but ri sky ex i t.A pre short signal could also be given

here.

Short Entry : Prices are above the U1 Target level , the Stream Average is now below

the Stream l ine .Enter short with a stop sl ightly above the Stream.

Short Cover: Prices have declined to below the L1 target level. Good point to cover the short at a

substantial profit.

A Note of Caution :the target indicator wil l use all the bars in the cha rt for it’s

calculation. If you are using an excessive number of bars it may take a while for the

indicator to load.

In very short time frames the direction of the trend line can change quickly and prices will hang

around an outer target until the trend is reversed. Always use a higher time frame for confirmation for

very short time trades.

The above guidelines are the most general only; many other conditions can be

established by using the indicator frequently. Flat or ranging markets can lead to

false signals, always use risk control when trading.

A

B

C

D

E



5) Alerts

The following alerts are included with the Fibonacci Channel and Target Indicators .They are set to

off by default when you install the the indicator.

Fibonacci Channel Alerts

Stream Avg Crossed Above Trend Marker

Stream Avg Crossed Below Trend Marker

Stream Avg Crossed Above Fibonacci Stream

Stream Avg Crossed Above Fibonacci Stream

Fibonacci Stream Crossed Above Trend Marker

Fibonacci Stream Crossed Below Trend Marker

Target Alerts

Close Crossed Above L2 Target Close Crossed Below U2 Target

Close Crossed Above L1 Target Close Crossed Below U1 Target

Close Crossed Above L1 Target Close Crossed Below Trend Line

Close Crossed Above Trend Line Close Crossed Below L1 Target

Close Crossed Above U1 Target Close Crossed Below L2 Target



To enable alerts ,select the indicator and enter the format menu . Check the “Enable Alert” selector in

the Alerts tab.



6) Using the T-Bars Paint Study

An additional Paint Bar Study is included with the indicator: T- Bars are created using the indicator

parameters to show possible market direction or trend reversal. The basic interpretation when using this

study is:

Uptrend

Correction

Corre

Downtrend Downtrend

Correction

Uptrend



7) Inputs Formatting

Most parameters used by the indicators have been optimized for better performance. You can vary the

following parameters in the format inputs menu for the indicator

Fibonacci Channel Indicator Input

You can turn the Trend Marker and Stream Average Lines off by setting TrendMarketOn

and StreamAvgOn to false in the input panel .Line colors can also be changed here .



Fibonacci Channel Target Indicator Inputs

In addition to changing the target line colors you can vary the position of the outer target lines U2 and

L2 as you wish by adjusting the parameter MaxTargetRatio as you desire.The default value is 0.5 , we

recommend values between 0.4 and 0.55.



T-Bars Paint Study Inputs

Here you can modify the down and up bar colors by changing the parameters UpBarColor and

DwnBarColor.



8) Policy

We have established the following policy for our products:

4.1) Platform Exclusive : An indicator running in one platform will only run in that platform.That is ,and

indicator runniing in TradeStation will only run in Trade Station.

4.2) Non Disclosure : No publications will ever be made available via any public media regarding the

calculation procedure to generate the indicator.

In a highly competitive environment we want to give our users an edge over other traders by

establishing this policy.Subscribers then become members of a limited pool of traders using a given

technique.

**THANKS AGAIN FOR HELPING MAKE THIS A GREAT TRADING TOOL. HAPPY TRADING**

All charts were created using TradeStation 9.1

We are not recommending the buying or sel l ing of any of the securities shown in the il lustrations. Trading involve

risks that you should be aware of before using any strategy.We are not l iable for any loses incurred by subscribers

while using any of our indicatos and or strategies. You are fully reponsible for the trades made based on signals

generated by this indicator.

Support Contact : [email protected]

mailto:[email protected]

Documents

The Fibonacci Channel Pro Indicator - TradeStation · The Fibonacci Channel Pro Indicator ... The addition of Automatic Trend and Target Lines makes the Fibonacci Channel Indicator