Multi-Fibonacci Trend Average[FibonacciFlux]

Multi-Fibonacci Trend Average (MFTA): An Institutional-Grade Trend Confluence Indicator for Discerning Market Participants

My original indicator/Strategy:

Engineered for the sophisticated demands of institutional and advanced traders, the Multi-Fibonacci Trend Average (MFTA) indicator represents a paradigm shift in technical analysis. This meticulously crafted tool is designed to furnish high-definition trend signals within the complexities of modern financial markets. Anchored in the rigorous principles of Fibonacci ratios and augmented by advanced averaging methodologies, MFTA delivers a granular perspective on trend dynamics. Its integration of Multi-Timeframe (MTF) filters provides unparalleled signal robustness, empowering strategic decision-making with a heightened degree of confidence.


MFTA indicator on BTCUSDT 15min chart with 1min RSI and MACD filters enabled. Note the refined signal generation with reduced noise.


MFTA indicator on BTCUSDT 15min chart without MTF filters. While capturing more potential trading opportunities, it also generates a higher frequency of signals, including potential false positives.


Core Innovation: Proprietary Fibonacci-Enhanced Supertrend Averaging Engine

The MFTA indicator’s core innovation lies in its proprietary implementation of Supertrend analysis, strategically fortified by Fibonacci ratios to construct a truly dynamic volatility envelope. Departing from conventional Supertrend methodologies, MFTA autonomously computes not one, but three distinct Supertrend lines. Each of these lines is uniquely parameterized by a specific Fibonacci factor: 0.618 (Weak), 1.618 (Medium/Golden Ratio), and 2.618 (Strong/Extended Fibonacci).

// Fibonacci-based factors for multiple Supertrend calculations
factor1 = input.float(0.618, 'Factor 1 (Weak/Fibonacci)', minval=0.01, step=0.01, tooltip='Factor 1 (Weak/Fibonacci)', group="Fibonacci Supertrend")
factor2 = input.float(1.618, 'Factor 2 (Medium/Golden Ratio)', minval=0.01, step=0.01, tooltip='Factor 2 (Medium/Golden Ratio)', group="Fibonacci Supertrend")
factor3 = input.float(2.618, 'Factor 3 (Strong/Extended Fib)', minval=0.01, step=0.01, tooltip='Factor 3 (Strong/Extended Fib)', group="Fibonacci Supertrend")

This multi-faceted architecture adeptly captures a spectrum of market volatility sensitivities, ensuring a comprehensive assessment of prevailing conditions. Subsequently, the indicator algorithmically synthesizes these disparate Supertrend lines through arithmetic averaging. To achieve optimal signal fidelity and mitigate inherent market noise, this composite average is further refined utilizing an Exponential Moving Average (EMA).

// Calculate average of the three supertends and a smoothed version
superlength = input.int(21, 'Smoothing Length', tooltip='Smoothing Length for Average Supertrend', group="Fibonacci Supertrend")
average_trend = (supertrend1 + supertrend2 + supertrend3) / 3
smoothed_trend = ta.ema(average_trend, superlength)

The resultant ‘Smoothed Trend’ line emerges as a remarkably responsive yet stable trend demarcation, offering demonstrably superior clarity and precision compared to singular Supertrend implementations, particularly within the turbulent dynamics of high-volatility markets.



Elevated Signal Confluence: Integrated Multi-Timeframe (MTF) Validation Suite

MFTA transcends the limitations of conventional trend indicators by incorporating an advanced suite of three independent MTF filters: RSI, MACD, and Volume. These filters function as sophisticated validation protocols, rigorously ensuring that only signals exhibiting a confluence of high-probability factors are brought to the forefront.

1. Granular Lower Timeframe RSI Momentum Filter

The Relative Strength Index (RSI) filter, computed from a user-defined lower timeframe, furnishes critical momentum-based signal validation. By meticulously monitoring RSI dynamics on an accelerated timeframe, traders gain the capacity to evaluate underlying momentum strength with precision, prior to committing to signal execution on the primary chart timeframe.

// --- Lower Timeframe RSI Filter ---
ltf_rsi_filter_enable = input.bool(false, title="Enable RSI Filter", group="MTF Filters", tooltip="Use RSI from lower timeframe as a filter")
ltf_rsi_timeframe = input.timeframe("1", title="RSI Timeframe", group="MTF Filters", tooltip="Timeframe for RSI calculation")
ltf_rsi_length = input.int(14, title="RSI Length", minval=1, group="MTF Filters", tooltip="Length for RSI calculation")
ltf_rsi_threshold = input.int(30, title="RSI Threshold", minval=0, maxval=100, group="MTF Filters", tooltip="RSI value threshold for filtering signals")

2. Convergent Lower Timeframe MACD Trend-Momentum Filter

The Moving Average Convergence Divergence (MACD) filter, also calculated on a lower timeframe basis, introduces a critical layer of trend-momentum convergence confirmation. The bullish signal configuration rigorously mandates that the MACD line be definitively positioned above the Signal line on the designated lower timeframe. This stringent condition ensures a robust indication of converging momentum that aligns synergistically with the prevailing trend identified on the primary timeframe.

// --- Lower Timeframe MACD Filter ---
ltf_macd_filter_enable = input.bool(false, title="Enable MACD Filter", group="MTF Filters", tooltip="Use MACD from lower timeframe as a filter")
ltf_macd_timeframe = input.timeframe("1", title="MACD Timeframe", group="MTF Filters", tooltip="Timeframe for MACD calculation")
ltf_macd_fast_length = input.int(12, title="MACD Fast Length", minval=1, group="MTF Filters", tooltip="Fast EMA length for MACD")
ltf_macd_slow_length = input.int(26, title="MACD Slow Length", minval=1, group="MTF Filters", tooltip="Slow EMA length for MACD")
ltf_macd_signal_length = input.int(9, title="MACD Signal Length", minval=1, group="MTF Filters", tooltip="Signal SMA length for MACD")

3. Definitive Volume Confirmation Filter

The Volume Filter functions as an indispensable arbiter of trade conviction. By establishing a dynamic volume threshold, defined as a percentage relative to the average volume over a user-specified lookback period, traders can effectively ensure that all generated signals are rigorously validated by demonstrably increased trading activity. This pivotal validation step signifies robust market participation, substantially diminishing the potential for spurious or false breakout signals.

// --- Volume Filter ---
volume_filter_enable = input.bool(false, title="Enable Volume Filter", group="MTF Filters", tooltip="Use volume level as a filter")
volume_threshold_percent = input.int(title="Volume Threshold (%)", defval=150, minval=100, group="MTF Filters", tooltip="Minimum volume percentage compared to average volume to allow signal (100% = average)")

These meticulously engineered filters operate in synergistic confluence, requiring all enabled filters to definitively satisfy their pre-defined conditions before a Buy or Sell signal is generated. This stringent multi-layered validation process drastically minimizes the incidence of false positive signals, thereby significantly enhancing entry precision and overall signal reliability.

Intuitive Visual Architecture & Actionable Intelligence

MFTA provides a demonstrably intuitive and visually rich charting environment, meticulously delineating trend direction and momentum through precisely color-coded plots:

• Average Supertrend: Thin line, green/red for uptrend/downtrend, immediate directional bias.
  
• Smoothed Supertrend: Bold line, teal/purple for uptrend/downtrend, cleaner, institutionally robust trend.
  
• Dynamic Trend Fill: Green/red fill between Supertrends quantifies trend strength and momentum.
  
• Adaptive Background Coloring: Light green/red background mirrors Smoothed Supertrend direction, holistic trend perspective.
  
• Precision Buy/Sell Signals: ‘BUY’/‘SELL’ labels appear on chart when trend touch and MTF filter confluence are satisfied, facilitating high-conviction trade action.
  

MFTA indicator applied to BTCUSDT 4-hour chart, showcasing its effectiveness on higher timeframes. The Smoothed Length parameter is increased to 200 for enhanced smoothness on this timeframe, coupled with 1min RSI and Volume filters for signal refinement. This illustrates the indicator's adaptability across different timeframes and market conditions.


Strategic Applications for Institutional Mandates

MFTA’s sophisticated design provides distinct advantages for advanced trading operations and institutional investment mandates. Key strategic applications include:

1. High-Probability Trend Identification: Fibonacci-averaged Supertrend with MTF filters robustly identifies high-probability trend continuations and reversals, enhancing alpha generation.
   
2. Precision Entry/Exit Signals: Volume and momentum-filtered signals enable institutional-grade precision for optimized risk-adjusted returns.
   
3. Algorithmic Trading Integration: Clear signal logic facilitates seamless integration into automated trading systems for scalable strategy deployment.
   
4. Multi-Asset/Timeframe Versatility: Adaptable parameters ensure applicability across diverse asset classes and timeframes, catering to varied trading mandates.
   
5. Enhanced Risk Management: Superior signal fidelity from MTF filters inherently reduces false signals, supporting robust risk management protocols.
   

Granular Customization and Parameterized Control

MFTA offers unparalleled customization, empowering users to fine-tune parameters for precise alignment with specific trading styles and market conditions. Key adjustable parameters include:

• Fibonacci Factors: Adjust Supertrend sensitivity to volatility regimes.
  
• ATR Length: Control volatility responsiveness in Supertrend calculations.
  
• Smoothing Length: Refine Smoothed Trend line responsiveness and noise reduction.
  
• MTF Filter Parameters: Independently configure timeframes, lookback periods, and thresholds for RSI, MACD, and Volume filters for optimal signal filtering.
  

Disclaimer

MFTA is meticulously engineered for high-quality trend signals; however, no indicator guarantees profit. Market conditions are unpredictable, and trading involves substantial risk. Rigorous backtesting and forward testing across diverse datasets, alongside a comprehensive understanding of the indicator's logic, are essential before live deployment. Past performance is not indicative of future results. MFTA is for informational and analytical purposes only and is not financial or investment advice.