ATR Trailing Stops and Fibonacci Retracement Targets for Trend Following

Summary

This document describes a trend-following approach that uses an ATR-based trailing stop to generate long and short entries, then calculates Fibonacci levels between that stop and a new high or low as potential profit targets. The listed defaults include a five-period ATR, a factor of 3.5, and three Fibonacci levels. The method is presented for BTC/USDT futures with daily bars and hourly base data over a stated one-year backtest period.

The source code generates entry signals when price crosses the trailing stop and plots the Fibonacci levels, but it does not implement exits at those levels. The document reports no performance results, so it does not establish profitability or risk reduction. It also warns that choppy markets can trigger repeated stops and calls for parameter testing, trend filters, or re-entry rules. The description should therefore be read as a strategy outline rather than evidence that the stated targets or safeguards work as intended.

Key ideas

• ATR multiplied by a configurable factor sets the distance used for the trailing stop.
• Price crossing the stop line triggers a long or short entry signal.
• Fibonacci levels between the stop and a new extreme are presented as potential profit targets.
• The source plots target levels but does not code exits at them.
• Ranging markets may cause repeated stop triggers, and the document provides no performance results.

Tags

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