ATR Envelopes with Trend-Anchored Fibonacci Pullback Zones

Summary

This indicator combines a configurable moving average with symmetric bands whose width is an ATR multiple. A persistent trend state turns bullish when price closes above the upper band and bearish when it closes below the lower band; it remains unchanged while price stays inside the envelope. The document then places 0.5, 0.618, and 0.786 levels within the band, anchoring them from the lower band in bullish regimes and from the upper band in bearish regimes. It highlights the 0.618–0.786 interval as a pullback zone and treats the opposite outer band as a trailing stop reference.

The explanation includes default settings of a 100-period moving average, a 100-period ATR, and a 3.0 ATR multiplier, plus platform-specific implementation code. It proposes using the state as a trend filter, waiting for pullbacks, and aligning signals across timeframes. These are suggested applications rather than tested results: no backtest or evidence for the claimed reaction zone is supplied. The code description also notes that some original display features are omitted or simplified.

Key ideas

• The envelope is centered on a configurable moving average and expands or contracts with ATR.
• The trend state changes only after a close beyond the opposite outer band.
• Fibonacci levels are calculated from the envelope range and re-anchored according to trend direction.
• The 0.618–0.786 band is presented as a trend-direction pullback area, while the outer band serves as a stop reference.
• The document proposes several uses but gives no backtest establishing their effectiveness.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.