Dynamic Fibonacci Levels
This indicator plots Fibonacci levels from an algorithm I created in the weekly chart. You can use it on any pair and any time frame. Basically, it plots different levels ranging from 0% to 5%, with levels like the 82% and 1.382% extensions that reject price most of the time. This are unique levels tested time and time again.
My mentor uses to call this "the top and bottom lock weekly analysis.
In just about every book I ever read on Market Speculation, somewhere the author suggests that the first step to trading success is to have a plan. They always say stick to your plan, if not you are doomed to failure! I always wondered what if the plan the trader came up with inherently stinks! Your doomed to fail as well. Is it any consolation that you failed following your stinky plan? I think not. The proper statement to make is have a Flexible Plan! Come up with an over all idea, do not marry it just date it.
We as traders can never marry an idea, we just want to date them. Whatever our analysis tells us we must be cognizant of what is know as the Market Paradox. The Market Paradox states that Commercial Interests will drive market prices Lower (Run Stops, AKA as a squeeze) in order to create better buying opportunities for their strong hands. Commercial Interests will drive Prices Higher (Run Stops, AKA squeeze) in order to create better selling opportunities for their strong hands. It is with this market truism that we can build a flexible trading plan for the week ahead.
Now you maybe asking if we are looking to prove our hypothesis wrong why even bother to do the analysis? Reason: We need to develop a plan based on what the weekly analysis is telling us. We will be proven correct many times, it is just the change in market sentiment that we have to be on the look out for that can cause a flip in our analysis. It is these trades that we can’t marry.
Top Lock Bottom Lock is my way of determining whether the market is showing the propensity to go down (Top Is Locked) or Up (bottom Is locked). We will use the weekly charts for this, and this indicator will do just that.
Every week the indicator will plot the Fibonacci as per the algorithm and if there was a change in market order flow, the indicator will change automatically, with levels up or down, showing you where the market has the propensity to go.