Fibonacci Arc Indicator

MT5 Market Levels TradingFree Download

The Fibonacci Arc Indicator for MT5 plotts dynamic curved lines that traders can utilize as price channel or even as support/resistence levels. The formula behind this tool includes Fibonacci-based calculations.

Let’s check some effective ways to introduce it to real trading – golden ratio strategies always provide interesting prospects. We’ll explore few approaches to find profitable and reliable ones.

Okay, so as first step take a look at chart, when you activate it in your platform, it should resemble this view.

Fibonacci Arc Indicator Example Chart

The anatomy of Fibonacci arc

As you can see there are two bent lines, violet one and blue one and they serve as visualisation of important market levels. Please note that they are are not plotted automatically, some manual actions are required.

In order to start, you need to click in any place of the chart and a violet straight line should appear. With second click you can adjust curvature of this line. Third and last click triggers the placement of blue line, you just need to specify the distance.

To utlize this effectively try to match peaks and bottoms of price with touch of the arcs. To give another shot just click a button in top right corner.

How to trade with this indicator?

Once the arcs are in place (just make sure to place them reliably), we can think how to get the most of this guage. See the following approaches.

Support and resistance trading

This strategy assumes trading within boundaries defined by the arcs. When price approaches upper or lower band and arcs are placed properly, there should be high probability reaction. Verify it with price action pattern (e.g. pin bar) and place order in the reversed direction.

Breakout trading

While above approch is very decent, sooner or later a breakout from arcs happens. Wait patientily for such scenario, as afterwards huge moves will most likely take place. There may be, however, some fakeouts – it’s adisable to not rush and double check the setup. Wait for the first pullback after the breakout.