The Fibonacci Average indicator for Metatrader 4 shows the most important Fibonacci retracement levels for multiple days on the Forex chart.
The indicator appears in the main MT4 chart window. Keep an eye on the popular 38.2% retracement level.
It’s being used by professional traders to buy dips in rising markets or sell rallies in declining markets.
The Fibonacci Average indicator can be used for both entry and exit signals or to confirm buy & sell trade setups issued by your favorite trading systems or strategies.
The indicator works equally well on all assets (Forex, CFD stocks, Indices, Cryptocurrencies, Commodities, etc.) and shows promising results if used correctly.
Free Download
Download the “fibonacci-average.mq4” indicator for MT4
Indicator Chart (EUR/USD H1)
The example chart below displays the Fibonacci Average mt4 indicator in action on the trading chart.
Tips:
Feel free to use your own favorite trade entry, stop loss and take profit method to trade with the Fibonacci Average Forex indicator.
As always, trade in agreement with the overall trend and practice on a demo account first until you fully understand this indicator.
Please note that even the best trading indicator cannot yield a 100% win rate over long periods.
Indicator Specifications & Inputs:
Trading Platform: Developed for Metatrader 4 (MT4)
Currency pairs: Works for any pair
Time frames: Works for any time frame
Trade Style: Works for scalping, day trading and swing trading
Input Parameters: Variable (inputs tab), color settings & style
Indicator type: Fibonacci
Does it repaint? No.
MT4 Scalping Strategy: Fibonacci Average & XP Moving Average
This scalping strategy combines the Fibonacci Average Indicator MT4 and the XP Moving Average Indicator MT4 to identify precise entry points in the forex market.
The Fibonacci Average Indicator highlights key retracement levels for multiple days, with the 38.2% level being particularly important.
The XP Moving Average Indicator visually represents the trend with a green line for an uptrend and a red downtrend line.
Together, they provide a reliable framework for scalping on short-term timeframes, such as the 5-minute or 15-minute charts.
Buy Entry Rules
- The XP Moving Average line is green, confirming an uptrend.
- Enter a buy trade when the price reaches the 38.2% Fibonacci retracement level in the uptrend.
- Set stop loss below the recent swing low or just under the 38.2% retracement level.
- Take profit at the first Fibonacci resistance level (R1) or higher, depending on market conditions.
Sell Entry Rules
- The XP Moving Average line is red, confirming a downtrend.
- Enter a sell trade when the price reaches the 38.2% Fibonacci retracement level in the downtrend.
- Set stop loss above the recent swing high or just above the 38.2% retracement level.
- Take profit at the first Fibonacci support level (S1) or lower, depending on market conditions.
Advantages
- Precision entries at key Fibonacci levels reduce risk and improve reward potential.
- Combining trend confirmation with retracement levels increases the probability of success.
- Suitable for scalping on short-term charts, including 5-minute and 15-minute timeframes.
- Easy to visualize market direction using the XP Moving Average indicator.
Drawbacks
- Requires careful monitoring and fast execution, which may not suit all traders.
- Not foolproof; proper risk management is essential to avoid losses.
Example Case Studies
Case Study 1: AUD/USD 5-Minute Chart
On the AUD/USD 5-minute chart, the XP Moving Average turned green, indicating an uptrend.
The price pulled back to the 38.2% Fibonacci retracement level, providing a buy entry signal.
A trade was entered at this level, with a stop loss below the swing low.
The price quickly moved upward, reaching the first Fibonacci resistance level (R1) for a profit of approximately 18 pips.
Case Study 2: USD/CHF 15-Minute Chart
On the USD/CHF 15-minute chart, the XP Moving Average turned red, confirming a downtrend.
The price retraced to the 38.2% Fibonacci level, offering a sell entry opportunity.
A sell position was opened with a stop loss above the recent swing high.
The price fell to the first Fibonacci support level (S1), yielding a profit of around 22 pips.
Strategy Tips
- Use this strategy during high volatility periods for quicker price movement.
- Combine with other indicators or price action patterns for additional confirmation.
- Backtest on multiple currency pairs to evaluate performance under different market conditions.
- Stick to stop loss and take profit levels to maintain disciplined risk management.
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Download the “fibonacci-average.mq4” indicator for Metatrader 4
