Volatility in the forex market can make it difficult to distinguish between trend waves and retracements. The Fibonacci Retracement Indicator for MT5 is a free tool designed to solve this problem. It automatically draws Fibonacci levels and filters out flat market phases, helping traders focus on active price movement.
The Fibo Retracement Indicator automatically plots Fibonacci levels on the MT5 chart, including 0%, 23.6%, 38.2%, 50%, 61.8%, and 100%. These levels help traders identify potential pivot points, where the main trend is likely to resume after a pullback.
The indicator is designed to work during active price movement, ignoring flat or sideways market phases. By highlighting retracement levels, traders can make better-informed decisions on entry, exit, and stop-loss placement.
Fibonacci levels are key percentages used in technical analysis to predict pullbacks:
100%: Starting point for Fibonacci levels.
61.8% (Golden Ratio): Common reversal area; acts as strong support or resistance.
50%: Reversals often form near this level as traders take short-term profits.
38.2%: Reversals form when traders are confident and active.
23.6%: Rare reversals; traders often wait for deeper pullbacks.
0%: End of the retracement move.
Higher levels, like 78.6%, are often skipped because trends typically resume earlier, making the Fibo Retracement indicator more precise and practical.
Pro Tip: When Fibonacci levels coincide with round numbers or other technical analysis tools, the probability of trend continuation increases.
The indicator is best used in combination with other tools, such as trend lines or the AutoTrendLines Indicator.
Example 1 – Selling after Pullback:
The retracement stops near the 61.8% and 50% levels, signaling a possible trend reversal. The trend line can act as an additional guide, while the stop loss should be placed behind the trend line for safety.
Example 2 – Buying after Pullback:
When the retracement reaches the 38.2% level, it indicates bullish momentum. Traders can open a buy position at market price and place the stop loss behind support.
The indicator does not redraw levels across timeframes. To adjust levels for a new timeframe, simply double-click the indicator to reset it.
Helps identify trend continuation after pullbacks.
orks for all timeframes: scalping, intraday, or long-term trading.
Atomatically plots accurate Fibonacci levels.
Assists in finding pivot points, stop-loss, and take-profit zones.
Provides insight into the market sentiment of forex participants.
The Fibonacci Retracement Indicator for MT5 is an essential tool for forex traders looking to predict trend pullbacks and reversals. It works across all timeframes and trading strategies, helping you spot optimal entry and exit points while understanding the general market mood. Combined with trend lines or other indicators, this tool can significantly improve your trading accuracy.
Published:
Nov 30, 2025 09:54 AM
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