The rolling rainbow uses an arbitrary pivot and calculates the deviation based on a short Fibonacci series.
The concept is simple. We employ a proprietary algorithm to select a pivot point in a deterministic fashion. Following selection, we used a short Fibonacci series to plot support and resistance areas away from the pivot . This works well when the price is moving sideways in the given time frame. If there is a strong trend causing the price to move beyond the last support or resistance, the pivot will be adjusted accordingly.
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