Discussing the article: "Price Action Analysis Toolkit Development (Part 65): Building an MQL5 System to Monitor and Analyze Manually Drawn Fibonacci Levels"
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Check out the new article: Price Action Analysis Toolkit Development (Part 65): Building an MQL5 System to Monitor and Analyze Manually Drawn Fibonacci Levels.
The Fibonacci retracement tool is an essential component of price action analysis, providing critical levels for potential market reactions. However, its effectiveness is often limited by the need for continuous human monitoring, which can lead to missed setups. In this part of our series, we introduce a tool that synchronizes and actively monitors manually drawn Fibonacci levels using MQL5, combining discretionary insight with automated oversight.
In the previous article, the focus was on synchronizing manually drawn trendlines with an automated monitoring system. That approach established a clear coordination model: the trader defines structure through discretionary drawing, while the Expert Advisor assumes responsibility for continuous observation. This combination allowed key interactions—such as touches, breakouts, and reversals—to be detected without constant chart monitoring, improving both efficiency and analytical consistency.
This article extends the same principle to another essential tool in price action analysis: the Fibonacci retracement. Instead of automating the drawing process, the system preserves manual input and introduces automation only at the monitoring stage. The trader defines the structure; the system tracks it.
Before exploring the implementation, it is important to briefly revisit the concept behind the Fibonacci retracement tool and its role in market analysis.
Fibonacci Retracement
The Fibonacci retracement tool is derived from the Fibonacci sequence, a numerical progression introduced by Leonardo of Pisa, where each number is the sum of the two preceding values. Ratios derived from this sequence—most notably 23.6%, 38.2%, 50%, 61.8%, and 78.6%—form the basis of the retracement levels used in trading. In price action analysis, the tool is applied by selecting two significant points on the chart, typically a swing high and a swing low. The retracement levels are then projected between these points, highlighting potential areas where price may pause, reverse, or continue its movement.
These levels are most effective when supported by confluence or confirmation from other market factors, acting as zones where price may pause, reverse, or continue.
Author: Christian Benjamin