Price Action Concept

FIBONACCI RANGES

Fibonacci Ranges with OTE (Optimal Trade Entry) are powerful tools for identifying high-probability trade entries within key retracement levels, offering opportunities for reversals or trend continuations. These zones are derived from Fibonacci retracement levels and are widely used in technical analysis.

Fibonacci Levels

Key levels are 61.8% and 78.6%, which form the OTE zone, where reversals or continuations are likely.

Levels

Trend Positioning

Uptrend: After a break above a range, the OTE zone lies below the midpoint of the new range, suggesting a buy zone.

Uptrend

Downtrend: After a break below, the OTE zone lies above the midpoint, suggesting a sell zone.

Downtrend

Labels

The indicator marks these Fibonacci levels with prices, making it easy to spot the OTE area for entries aligned with the trend.

Labels

In essence, OTE within Fibonacci ranges provides ideal retracement levels for trend-aligned trades.

Golden Pocket (61.8%–65% Zone)

The Golden Pocket is the most significant Fibonacci retracement zone, located between the 61.8% and 65% levels.

It is widely used in institutional trading models because it represents the optimal retracement point where price most often reacts before continuing its primary trend.

When enabled, the indicator highlights this zone on the chart, helping traders visually identify high-probability reversal or continuation points.

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Premium and Discount

Premium & Discount

To understand Premium and Discount zones, it's essential to first grasp the concept of Equilibrium:

Equilibrium (Fair Value)

This is the midpoint of a selected price range, representing the "fair value" within that range. It serves as a reference point to determine whether the price is in a premium or discount zone.

Equilibrium

Premium Zone

The area above the equilibrium. Prices in this zone are considered overvalued relative to the range. Smart money and ICT (Inner Circle Trader) traders often look for sell opportunities in the premium zone, especially in a downtrend or after a significant upward movement.

Premium Zone

Discount Zone

The area below the equilibrium. Prices in this zone are considered undervalued. Traders typically look for buy opportunities here, especially in an uptrend or after a downward movement.

Discount Zone

Entry Zone

Marks the preferred area for entering a trade within the trend. In an uptrend, the entry zone lies in the discount zone below equilibrium; in a downtrend, it’s in the premium zone above equilibrium.

Entry Zone (Above)

Entry Zone (Below)

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Predictive Zones

This indicator automatically detects price levels and ranks them based on market activity:

Predictive Levels

Predictive Levels: Calculates key price levels using volume and price volatility.

Level Ranking (0-10): Levels are scored based on the volume strength of price interactions—higher values indicate stronger levels.

Zone Ranking (0-10): Measures how long price stays within a zone—higher values indicate more significant consolidation zones.

Zone rank

Level rank

Visual Elements:

• Colored lines represent detected levels (gradient color from blue to orange based on rank).

• Labels indicate ranking scores for levels and zones.

• Zones highlight potential areas of interest.

This tool helps traders identify high-impact price levels and assess liquidity zones for potential reversals or breakouts.

Settings

These settings allow traders to enable different price action-based tools within the indicator:

Settings

1. Fibonacci Ranges:

   • Enables automatic plotting of Fibonacci retracement levels based on recent price movements.

   • The dropdown menu (default: 5) selects the number to change length calculation.

   • Golden Pocket: Enables automatic detection of the golden pocket area

2. Premium Discount:

   • Highlights areas of the chart based on the premium (overpriced) and discount (underpriced) zones.

   • Users can customize the colors for different sections (green for discount, red for premium, dark for neutral).

3. Predictive Zones:

   • Enables Predictive Zones Indicator, which detects key price levels and ranks them based on market activity.

   • Length (50): Defines the lookback period for detecting levels.

   • Width (4): Controls the thickness of the zone visualization on the chart.

These tools help traders analyze price action concepts and identify potential areas for reversals, support, or resistance.