Fibo Bands Indicator

Fibo Bands Indicator

The Fibo Bands Indicator for MT5 replaces standard deviation based Bollinger Bands with Fib based odds. Effective Forex reversal trading indicator

The True Bands Fibo Indicator for MT5 displays Bollinger Bands using Fibo levels instead of standard deviation. It uses Fibonacci ratios of 1.618, 2.618 and 4.236 to automatically calculate and plot bands at these levels. As a result, forex traders enter the markets based on a combination of these indicators to achieve profitable trading results.

The indicator works according to the trading rules of Bollinger Bands. So, new Forex traders should familiarize themselves with the rules before starting to trade.

However, advanced traders can trade these indicators along with others. Additionally, Bollinger Bands are suitable for automated trading strategies.

Fibo Bands Indicator For MT5 Trading Signals

The indicator displays three upper bands and three lower bands. The outer upper and lower light green bands correspond to the 4.236 Fibonacci levels, the middle red bands correspond to the 2.618 Fibonacci levels, and the inner green bands correspond to the 1.618 Fibonacci levels. The trading strategy is to enter the market if the price touches the outermost or middle band and turns outside the inner band.

If the price rises higher and reaches the extreme outer or middle band, it is considered overbought. Traders expect a price reversal; to confirm, the price must reverse and close below the inside band to open a sell trade. It is very important to place a stop loss above the previous swing high and target the opposite band to lock in profits.

A similar trading strategy can be used in the event of a bullish reversal. Traders can apply the same stop loss and profit strategy for this buy trade.

Conclusion
Thus, the Fibo Bands Indicator for MT5 is a different version of the classic Bollinger Bands indicator in Forex. It replaces the standard deviation and instead uses Fibonacci levels to calculate bands.