This script is a technical analysis tool designed to automatically plot key price levels on your trading charts. It combines two popular trading concepts—Pivot Points and Fibonacci Retracements—into a single visual indicator to help traders identify potential areas of support and resistance.
How the Logic Works
The script operates by analyzing the price action of the previous trading day to determine where the market might react during the current session. Here is the step-by-step breakdown of its logic:
1. Data Collection The tool constantly monitors the "High" (the highest price reached), the "Low" (the lowest price reached), and the "Close" (the final price) of the preceding trading period. It uses these three primary data points to establish a baseline for all subsequent calculations.
2. The Pivot Point Calculation The core of the script is the Pivot Point (P). It calculates this by taking the average of the previous day's High, Low, and Close prices. This serves as the "center" or equilibrium point for the current trading day.
3. Fibonacci Scaling Once the Pivot Point is established, the script calculates the total range of the previous period (the distance between the High and the Low). It then applies specific Fibonacci ratios to this range to project three levels of support and resistance above and below the main Pivot Point:
- Primary Levels (S1/R1): These are calculated using the 0.382 ratio. They represent the first immediate zones where price may consolidate or bounce.
- Secondary Levels (S2/R2): These use the 0.618 ratio, which is a key "Golden Ratio" in trading used to identify deeper pullbacks or trend continuations.
- Extreme Levels (S3/R3): These use a high ratio (0.99) to mark the outer boundaries of the expected price movement for the day.
4. Visual Updates As new trading sessions begin, the script automatically updates these levels on your chart. It identifies the start of a new day by checking the timestamp of the candles. When a new day is detected, it resets its memory of the "High" and "Low" and recalculates all seven lines (the Pivot and the six surrounding Fibonacci levels) based on the newly completed data.
Summary for the Trader
Instead of manually calculating complex math to find where a price might turn around, this script automates that process. It provides a visual "map" of the day's expected territory, highlighting:
- Resistance Zones: Where the price may struggle to move higher (marked in Lime and Yellow).
- Support Zones: Where the price may find a floor and bounce upward (marked in Lime and Yellow).
- Extreme Boundaries: The outer limits of the day's anticipated volatility (marked in Red).
//+------------------------------------------------------------------+
//| Pivot_Fibs.mq4 |
//| Copyright © 2006, Archer Trading, LLC |
//| http://www.archertrading.net/ |
//+------------------------------------------------------------------+
#property copyright "Archer Trading, LLC"
#property link "http://www.archertrading.net/"
#property indicator_chart_window
#property indicator_buffers 7
#property indicator_color1 White
#property indicator_color2 Lime
#property indicator_color3 Lime
#property indicator_color4 Yellow
#property indicator_color5 Yellow
#property indicator_color6 Red
#property indicator_color7 Red
double PBuffer[];
double S1Buffer[];
double R1Buffer[];
double S2Buffer[];
double R2Buffer[];
double S3Buffer[];
double R3Buffer[];
double S0Buffer[];
double R0Buffer[];
string Pivot="Pivot Point",FibS1="S 1", FibR1="R 1";
string FibS2="S 2", FibR2="R 2", FibS3="S 3", FibR3="R 3";
int fontsize=10;
double P,R,S1,R1,S2,R2,S3,R3;
double LastHigh,LastLow,x;
//+------------------------------------------------------------------+
//| Custor indicator deinitialization function |
//+------------------------------------------------------------------+
int deinit()
{
ObjectDelete("Pivot");
ObjectDelete("FibS1");
ObjectDelete("FibR1");
ObjectDelete("FibS2");
ObjectDelete("FibR1");
ObjectDelete("FibS3");
ObjectDelete("FibR2");
//----
return(0);
}
//+------------------------------------------------------------------+
//| Custom indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
string short_name;
SetIndexStyle(0,DRAW_LINE,0,2,White);
SetIndexStyle(1,DRAW_LINE,0,2,Lime);
SetIndexStyle(2,DRAW_LINE,0,2,Lime);
SetIndexStyle(3,DRAW_LINE,0,2,Yellow);
SetIndexStyle(4,DRAW_LINE,0,2,Yellow);
SetIndexStyle(5,DRAW_LINE,0,2,Red);
SetIndexStyle(6,DRAW_LINE,0,2,Red);
SetIndexBuffer(0,PBuffer);
SetIndexBuffer(1,S1Buffer);
SetIndexBuffer(2,R1Buffer);
SetIndexBuffer(3,S2Buffer);
SetIndexBuffer(4,R2Buffer);
SetIndexBuffer(5,S3Buffer);
SetIndexBuffer(6,R3Buffer);
//---- name for DataWindow and indicator subwindow label
short_name="Fibonacci Pivot Points";
IndicatorShortName(short_name);
SetIndexLabel(0,short_name);
//----
SetIndexDrawBegin(0,1);
//----
//----
return(0);
}
//+------------------------------------------------------------------+
//| Custom indicator iteration function |
//+------------------------------------------------------------------+
int start()
{
int counted_bars=IndicatorCounted();
int limit, i;
//---- indicator calculation
if (counted_bars==0)
{
x=Period();
if (x>240) return(-1);
ObjectCreate("Pivot", OBJ_TEXT, 0, 0,0);
ObjectSetText("Pivot", "Pivot",fontsize,"Arial",White);
ObjectCreate("FibS1", OBJ_TEXT, 0, 0, 0);
ObjectSetText("FibS1", "Fib S1",fontsize,"Arial",Lime);
ObjectCreate("FibR1", OBJ_TEXT, 0, 0, 0);
ObjectSetText("FibR1", "Fib R1",fontsize,"Arial",Lime);
ObjectCreate("FibS2", OBJ_TEXT, 0, 0, 0);
ObjectSetText("FibS2", "Fib S2",fontsize,"Arial",Yellow);
ObjectCreate("FibR2", OBJ_TEXT, 0, 0, 0);
ObjectSetText("FibR2", "Fib R2",fontsize,"Arial",Yellow);
ObjectCreate("FibS3", OBJ_TEXT, 0, 0, 0);
ObjectSetText("FibS3", "Fib S3",fontsize,"Arial",Red);
ObjectCreate("FibR3", OBJ_TEXT, 0, 0, 0);
ObjectSetText("FibR3", "Fib R3",fontsize,"Arial",Red);
}
if(counted_bars<0) return(-1);
//---- last counted bar will be recounted
// if(counted_bars>0) counted_bars--;
limit=(Bars-counted_bars)-1;
for (i=limit; i>=0;i--)
{
if (High[i+1]>LastHigh) LastHigh=High[i+1];
if (Low[i+1]<LastLow) LastLow=Low[i+1];
if (TimeDay(Time[i])!=TimeDay(Time[i+1]))
{
P=(LastHigh+LastLow+Close[i+1])/3;
R = LastHigh-LastLow;
R1 = P + (R * 0.382);
S1 = P - (R * 0.382);
R2 = P + (R * 0.618);
S2 = P - (R * 0.618);
R3 = P + (R * 0.99);
S3 = P - (R * 0.99);
LastLow=Open[i]; LastHigh=Open[i];
ObjectMove("Pivot", 0, Time[i],P);
ObjectMove("FibS1", 0, Time[i],S1);
ObjectMove("FibR1", 0, Time[i],R1);
ObjectMove("FibS2", 0, Time[i],S2);
ObjectMove("FibR2", 0, Time[i],R2);
ObjectMove("FibS3", 0, Time[i],S3);
ObjectMove("FibR3", 0, Time[i],R3);
}
PBuffer[i]=P;
S1Buffer[i]=S1;
R1Buffer[i]=R1;
S2Buffer[i]=S2;
R2Buffer[i]=R2;
S3Buffer[i]=S3;
R3Buffer[i]=R3;
}
//----
return(0);
}
//+------------------------------------------------------------------+
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