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# How does the Fibonacci Open slot work?

Forex Forum → How does the Fibonacci Open slot work?

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## Posts: 5

#### Topic: How does the Fibonacci Open slot work?

When I use Fibonacci as Open Slot logic I saw a lot of Fibonacci retracement line on the Chart, it's very fine! But how does it work, what logic it use to determine when to place the retracement lines? And what means the Sensitivity?
Thanks!

#### Re: How does the Fibonacci Open slot work?

Hi Francis,

The indicator placed in the Open Slot determines the entry level.
In that case, the entry levels are at the 38.2%, 50%, 61.8% and the 100% Fibo retracement lines.

FSB plots 5 of the Fibonacci lines:
green - the current top (or bottom ) - 0% retracement
yellow - 38.2%
purple - 50.0%
violet - 61.8%
and red - 100% retracement - this is the previous bottom (or top)

When FSB recognizes a point as a Top (or bottom) it puts this 5 lines starting from the next bar. The program tries to be 100% sure of the calculations. It waits until the ending of the bar to determine is the current highest price top. Once the program knows the  current top it calculates the lines using last bottom as a 100% retracement line.

If the market falls, it crosses the fibo lines consecutively and the FSB checks the logic at each line.
When the price touches the first - 38.2% line, FSB checks all the open conditions and if they allows it opens a new long position (Logic - Reverse) ore a short one (Logic - Continue).
If the conditions do not allows there is no a signal.

The same happens at each line.

Once a line has been touched it can not be used as an entry point again. It works only the first time. We avoid multiple signals.

The parameter sensitivity serves to guide Fibo indicator to recognize a market top as a Fibo top. Greater the number means that the Fibo needs a higher top (or a lower bottom).

PS
--------------
This indicator can be very tricky. It sometimes repaints the past changing the tops and the bottoms.
I want to advise you - DO NOT use it on the real market. I put it in the list of the indicators to give you an opportunity to discover its diabolism. It happens very rear, but it is vital on the real market.

#### Re: How does the Fibonacci Open slot work?

Hi!

I just started using your program. I see thet fibonacci is one of the best strategy.
But I do not understand how it works in detail.
You written that the top is repainted sometimes.
Could you describe more precisely its algorithm?

#### Re: How does the Fibonacci Open slot work?

The FSB Fibonacci indicator uses the peaks and bottoms determined by Zig-Zag indicator. There is a smoothing function that prevents the Zig-Zag to place tops and bottoms on near bars.

If the market moves rapidly up, down and up again (new pick) in a short period of time (3-5 bars), Zig-Zag places a top at the second pick instead of placing two tops and a bottom between them. In that way, the the Fibonacci (Zig-Zag) looks well on the chart. But, if you trace the process you will see that the indicator plots the first top first, plots the bottom and after the rally it removes both previous points and puts one top only.

This situation happens rear (a significant movement is necessary) but,  if you use the breakthrough logic, the loosing signals will be removed

#### Re: How does the Fibonacci Open slot work?

Hi Popov,
I just came across your service yesterday, very impressed on it's rich features.  I've been using Hivetrader/Fxengines for about 4 years and I see a lot of potential for your site....actually why don't you merge with them?? They have automated trading (and tick by tick data since 2001) but they lack the signals and system generator/optimizing capability you provide.   Seems like it would be a perfect marriage.

Anyways, quick question regarding the Fibonacci.  What time interval were you using?  Is this signal more reliable on daily data?  Is it possible to take this indicator live using metatrader?  I'm waiting for the other shoe to drop on my system, as I've used pessimistic scenario, have intrabar accomplished, have maxed out spreads and swaps and have tested out of sample data by switching currency pairs...and I'm still seeing outstanding results.   This is all on daily data.

I guess I'm asking the realism of this strategy and if in your opinion I can code fibonacci to trade live via another source.

Cheers!

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