Automatic Supertrend Fibonacci Retracement Grids and OTE Bands

Summary

This indicator uses a slow Supertrend to define trend legs and automatically anchor Fibonacci retracement levels to each leg. At a trend flip, it resets the anchors using the flip bar and a five-bar lookback, then updates them as the leg makes new highs or lows. The grid includes standard retracement ratios and highlights whichever level lies within one ATR of the close. Its 0.618–0.786 area marks the Optimal Trade Entry zone; the document frames shallower pullbacks as possible continuation areas and the 1.000 level as a point where the leg has been fully retraced.

An alternative mode plots ratio-based bands offset from the Supertrend, making a continuous channel that does not track leg structure. The explanation gives the indicator’s construction and practical reading guidance, but no backtest or performance evidence. It cautions that early-leg levels can shift, a wick can permanently widen the grid, and a false Supertrend flip can reset the map. The highlighted level shows proximity, not whether a pullback will succeed, so the indicator provides structure rather than confirmation.

Key ideas

• A slow Supertrend defines when a leg starts and triggers grid re-anchoring when its direction changes.
• The leg’s running extremes determine the retracement levels, with a five-bar lookback used at the flip to capture nearby extremes.
• The 0.618–0.786 retracement area is shaded as the OTE zone, while the 1.000 level marks a full giveback of the leg.
• A level near price is highlighted by ATR distance, but proximity does not confirm trend continuation.
• Wick spikes, unstable new legs, and Supertrend whipsaws can make the grid misleading.

Tags

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