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Candle Fibs [QuantVue]

The Candles Fib indicator is designed to help traders find potential levels of support and resistance based on ATR and Fibs.

How the Indicator Works

Identification of Large Candles:
🔹The indicator begins by identifying "large candles" based on their size relative to the Average True Range (ATR).

🔹ATR (Average True Range): ATR is a technical analysis indicator that measures market volatility by averaging the true range over a specified period, default 10 periods. The true range is the greatest of the following:

The difference between the current high and current low.
The difference between the previous close and the current high.
The difference between the previous close and the current low.

🔹In this script, a candle is considered "large" if its true range (the difference between the high and low) is at least twice the ATR.

Calculation of Fibonacci Levels:
🔹Once a large candle is identified, the indicator calculates key Fibonacci retracement levels based on the size of the candle.

🔹Fibonacci Retracement: Fibonacci retracement levels are horizontal lines that indicate where support and resistance are likely to occur. These levels are derived from the Fibonacci sequence, a series of numbers where each number is the sum of the two preceding ones, often found in nature and markets.

🔹The most commonly used Fibonacci retracement levels are 0.382, 0.50, 0.618, and 0.786. In this indicator, the 0.50 and 0.618 levels are used.

Dynamic Plotting and Management of Levels:
🔹The indicator plots these Fibonacci levels as horizontal lines on the chart automatically.

🔹These lines extend as new bars (candlesticks) are formed, allowing the trader to see how the market reacts to these levels in real-time.