HOW-TO: FibDev Indicator

This tutorial is to explain our FibDev Indicator using AMD 15m chart example.

Overview of the daily zones:

-- Starting with red zones, these are our daily supply zones. We expect these zones provide resistance and act as potential pivot points for the price to reverse

-- The yellow zone is the neutral zone, when price is in this zone we expect that it will continue to chop around until it has chosen a direction for the day.

-- The green zones are demand zones. Similar to the supply zones, we expect these zones to provide support and act as possible pivots for the price to rebound

-- These zones are built based on previous daily price action and ** the zones will be the same on all time periods for any given day **

Overview of the intraday clouds:

-- The upper cloud (red outline) is where we expect to encounter an overbought condition, and that price may reverse down

-- The lower cloud (green outline) is where we expect to encounter an oversold condition, and that the price may rebound upwards

-- These clouds are built based upon ** the time period of the chart that is selected **. Thus the 5m clouds will be different than the 15m clouds.

Overview of the automated signals:

-- These signals are printed when we expect there is a chance of trend reversal. It should be noted that trading against the trend is very risky.

-- They do NOT serve as buy and sell signals, they are merely indications that price has entered a place of possible reversal.


Our thoughts on how to use this data:

--The main way we like to use this is by looking for scenarios where we have a wick or close that has broken above or below the intraday cloud at the same time that it is testing a supply or demand zone. Looking at this AMD example here, you can see a few scenarios where it wicked or closed into the lower cloud (some creating Bull signals) and was also testing a demand zone. This provides a layer of confluence as it's not only testing a daily demand zone but it's also testing the faster, intraday oversold zone (the lower cloud).

-- A secondary way to use this data is similar to the ORB strategy, where you essentially chase (or ride the momentum) the price once it has broken to the upside or downside of the yellow neutral zone. With this strategy, your potential profit zones would then become the supply or demand zones depending on which way the price moved.

Conclusion:

-- Ultimately it's up to you and how you choose to use this data and confluence it with other TA tools is completely up to you and your trading strategy.

-- For more information on using this indicator, please send us a message here or on Twitter (link found in our profile).

Thank you!

Great Blue Trading Team

Comment:

We have recently made some significant changes to the UI and the way signals are created. We are now tracking neutral zone break outs, whether up or down and displaying the target zones in said direction only. The core concepts have not changed, reversal plays can still be made just the same as before using wicks/closes/zones to watch for oversold or overbought areas. The main difference is there will be no more automated signals created for these scenarios.

Comment:

We have published an updated HOW-TO article capturing the changes, linked below. Thank you!