INDICES Fibonacci Channel (3650 SMA with Labels)

INDICES ONLY

This script dynamically combines Fibonacci levels with the 3650-period simple moving average (SMA), offering a powerful tool for identifying high-probability support and resistance zones. By adjusting to the changing 3650 SMA, the script remains relevant across different market phases.

Key Features:
Dynamic Fibonacci Levels:

The script automatically calculates Fibonacci retracements and extensions relative to the 3650 SMA.
These levels adapt to market trends, offering more relevant zones compared to static Fibonacci tools.
Support and Resistance Zones:

In uptrends, price often respects retracement levels above the 3650 SMA (e.g., 38.2%, 50%, 61.8%).
In downtrends, price may interact with retracements and extensions below the 3650 SMA (e.g., 23.6%, 1.618).
Customizable Confluence Zones:

Key levels such as the golden pocket (61.8%–65%) are highlighted as high-probability zones for reversals or continuations.
Extensions (e.g., 1.618) can serve as profit targets or bearish continuation points.
Practical Applications:
Identifying Reversal Zones:

Look for confluence between Fibonacci levels and the 3650 SMA to identify potential reversal points.
Example: A pullback to the 61.8%–65% golden pocket near the 3650 SMA often signals a bullish reversal.
Trend Confirmation:

In uptrends, price respecting Fibonacci retracements above the 3650 SMA (e.g., 38.2%, 50%) confirms strength.
Use Fibonacci extensions (e.g., 1.618) as profit targets during strong trends.
Dynamic Risk Management:

Place stop-losses just below key Fibonacci retracement levels near the 3650 SMA to minimize risk.
Bearish Scenarios:

Below the 3650 SMA, Fibonacci retracements and extensions act as resistance levels and bearish targets.
How to Use:
Volume Confirmation: Watch for volume spikes near Fibonacci levels to confirm support or resistance.
Price Action: Combine with candlestick patterns (e.g., engulfing candles, pin bars) for precise entries.
Trend Indicators: Use in conjunction with shorter moving averages or RSI to confirm market direction.
Example Setup:
Scenario: Price retraces to the 61.8% Fibonacci level while holding above the 3650 SMA.
Confirmation: Volume spikes, and a bullish engulfing candle forms.
Action: Enter long with a stop-loss just below the 3650 SMA and target extensions like 1.618.
Key Takeaways:
The 3650 SMA serves as a reliable long-term trend anchor.
Fibonacci retracements and extensions provide dynamic zones for trade entries, exits, and risk management.
Combining this tool with volume, price action, or other indicators enhances its effectiveness.