Automatic Fibonacci Retracements from Donchian ZigZag Swings
Summary
This indicator automatically identifies the latest price leg with a ZigZag pivot process based on rolling Donchian highs and lows, then draws Fibonacci retracement levels across the chart. A configurable depth controls swing sensitivity: shorter windows respond to smaller price moves, while longer windows emphasize broader structure. The indicator stores pivot prices and bar positions, calculates levels between the latest two pivots, and extends horizontal lines to the current bar. Optional labels show each level and its price, and a reverse setting swaps the anchors.
The article suggests using the 38.2%–61.8% region to frame pullback entries, deeper levels as possible invalidation references, and the swing extremes for structural stops or targets. It also recommends checking confluence with independent support, resistance, or moving averages. These are chart-reading suggestions, not demonstrated trading results: the document reports no backtest or evidence that the levels predict profitable trades. Because the swing grid changes when pivots are confirmed, readings depend on the ZigZag settings and may shift as price develops; any trading use needs explicit confirmation, risk rules, and testing.
Key ideas
- The indicator uses rolling highs and lows to locate pivots and define the latest swing.\nA depth setting controls how sensitive the ZigZag is to short-term versus larger price moves.\nFibonacci ratios are calculated from the latest two pivots and displayed as horizontal price levels.\nThe article proposes retracement bands, swing boundaries, and independent confluence as possible trade references.\nThe document supplies no performance evidence, so the suggested uses require separate testing.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.