In case you are familiar with Fibonacci trading method, and you fancy technical analysis at the same time, than you’ll love this indicator as well. I warmly suggest this one to the beginners due to its simplicity and automated drawing of Fibonacci levels. Thanks to Leonardo Fibonacci we get great trading tool.
Beginners normally have quite heavy troubles with Fibonacci indicators (tool) embedded within their platform. Standard Fibonacci indicator, that comes as default on your platform, serves to meet the bottom and the top of candles at chart. That’s the easy part and everybody can get over it with no troubles. Hence, when you meet two tops, problems are about to pour in. More problems occur upon meeting the last two, or perhaps the bottom and top of the last big trend, bottom and daily high low. This is where it gets more confusing and if beginner fails to trade with profit after setup (joining two tops, known to be the best move with Fib. indicator) then situation becomes utterly confusing and desperate.
This indicator successfully solves all these troubles. How and why, I am about to explain you. Have a look how KorDynamicFibonacci looks on chart.
KorDynamicFibonacci automatically joined the tallest and the shortest last four tops, drawing Fibonaccy levels for each of high-lows. It uses zig-zag method to draw high-low levels.
In this case, indicator drew only the last four high-low levels. Sometimes there are more of them, depending on the market circumstances. For you, it’s the most important to choose time frame you normally trade at and have a look what this indicator has to offer, i.e. how many high-low levels it would draw. Hence, the first problem – which high-low levels to draw – has been successfully solved by KorDynamicFibonacci.
I am about to additionally explain you how this indicator works giving you detailed explanation of the problem settlements.
You saw how it looks like, it’s about time to hear a word or few more about it.
At the graph above, I marked the lines joining high-low levels. These levels are used for calculating Fibonacci levels on your right-hand side. High-low levels are marked with numbers with belonging Fibonacci levels marked with alphabet letters.
The last high-low at chart, I marked off with number 1 with it’s Fibonacci levels right next to it, marked with letter ‘a’. And it goes on by the same pattern 2 – b, 3 – c, 4 – d.
Before I move on, I want to drag your attention at the last high-low. In this case, that would be number 1. At this indicator, the last high-low is dynamic until the moment the new high-low level is formed. It might also happen it fixes slightly before the next high-low is done. However, this should not bother you, instead you should not pay heed to it. Those who are familiar with trading with Fibonacci method are introduced to the fact that for drawing Fibonacci level it doesn’t take drawing Fibonacci for the current price. This is especially characteristic to the lower time frames. If you trade at H4 and higher, then you can consider the last (in our case: 1-a) high-low for drawing Fibonacci.
How To Trade With KorDynamicFibonacci indicator
I planned to finish this text by September, henceforth I won’t be explaining you entire Fibonacci method, up and down the matter. At least not in this text as this article is dedicated to the indicator. However, I will highlight the basics.
We all know that Fibonacci levels are used by traders as support and resistance for decades. It stands for highly reliable tool to find new levels where the price will encounter heavy resistance or heavy support. These levels are normally used for opening positions or setting stop loss.
Clearly, this indicator serves the same purpose. In the example below, I will try to find the levels where the price would eventually encounter either support or resistance.
One to three Fibonaccis are normally drawn and then the best one is picked out – the one providing the largest amount of info is chosen to trade with. Vast majority of traders keep one Fibonacci on their chart, while you might find few exceptions trading with more.
This indicator is simple to use. It took me no longer than 5 minute, when I first opened it. The idea is that one drawn Fibonacci gives good result if you have more of them giving the approximately same results, it is additional confirmation. Have a look at the chart below to get a better grasp.
The green level at the graph represents the adjustment of 4 Fibonaccis, whereas each of them is in approximately the same level, and the idea is there will be heavy resistance in our case. Fibonacci a – 0.0%, Fibonacci b – 25%, c – 75% and at 50%.
This level could be well used for eventual take profit if we assumed the price would hit uptrend. If we think the price would drop in a period to come, green level can be used to open sell position.
In case I had reasons to believe the price would hit uptrend, I would have to open the price immediately placing take profit somewhere in the green level, as done on the graph.
Indicator draws too many levels sometime, making it really difficult to navigate around without getting confused. If this could be a problem to you, you can always find indicator that would draw only the basic Fibonacci levels – or you could draw them yourself.