Fibonacci Levels (using Min/Max)

To calculate a Fibonacci level you first need a minimum and maximum point. Normally a person is sitting in front of a chart, and they click on a minimum point in the chart, and then a maximum point, and all these Fib lines are drawn for them.

But how should a computer do this? Well, we expressly included the words "(using Min/Max)" in the name to make sure people know how we do it, because we weren't sure if it's the standard way to do this calculation or not. Anyway, when you use this indicator you have to enter 3 values - the maximum period, the minimum period, and the Fibonacci Level as a percent.

Let's say you enter these values:

• Minimum period: 50
• Maximum period: 75
• Fib. level (%): 61.8

First ATM finds the minimum value over the last 50 bars. This low point is thought of as the 0% Fibonacci Level.

Then it finds the maximum value over the last 75 bars. This high point is thought of as the 100% Fibonacci Level.

This Investopedia page on Fibonacci Retracements shows it nicely.

And we wanted the Fib level at 61.8% so we entered 61.8 (some people use 0.618, others 61.8%, and we went with the latter).

So for the standard Fibonacci Retracements, just type in 23.6 / 38.2 / 50.0 / 61.8 / etc. For the standard Fibonacci Extensions, type 161.8 / 261.8 / 423.6 / etc (as per this Investopedia page on Fibonacci Extensions).

But you are not limited to the standard levels. In fact you can type any number you like. You can enter a level of 123.45 if you want. And you can enter a negative number to extend beyond the low point.

• 61.8 is a Fibonacci Level in between the high and low points
• 161.8 is an extension going above the high point
• -61.8 is an extension going below the low point