Calculating the Fibonnaci Levels of a Candle

[daedalus 10]

I'd like to qualify a study to check and see if the close of a candle is below or above the 78.6 retracement value of that candle. Except I can't seem to calculate the value to check correctly.

 

{C = B + (A — B) x N%}

This is for a downtrend candle.

Step1 = High - Low;
Step2 = Step1*.786;
Step3 = Low + Step2;
Plot4( Close, "IB FO S 78.6", IBShortColor );
Plot9(""+ numtoStr(Step3,5),"78.6 Value");
Alert("IB Fakeout S");
end;

NoPlot( 4 ); 

 

So that is what I was doing, which obviously doesn't quite work. Am i thinking about this wrong? Fibonacci is simply a measure of percentage of a given length in a market. Thus, if I want to measure a candle I need to measure the From the High to the Low, and then multiply that by .786 to get 78.6% measure of the candle right?

Edited June 24, 2009 by daedalus

[daedalus 10]

I've been referencing this page for calculating it....

 

Fibonacci method in Forex - Calculate Fibonacci Levels

 

Have I done wrong?

[atto 20]

I don't know EasyLanguage (assuming that's what it is), but where are you measuring from (the high, low, median, something else)? Ret768 is just .768 * the spread, so "if Close < Ret768" will practically always be false (example, if ES closed at 900.00 and the spread is 10.00, you're asking "is 900.00 less than 7.68?"). If you're wanting .768*spread from the High, try something like this (again, I know nothing of this language):

...
if Close < High-Ret768 then
...

[daedalus 10]

Nevermind gents... daddy cracked it! I was having issues because depending on which way the retracement is going you either need to multiply X .786 for longs, or by its inverse .214 for shorts.

 

Step1S = High - Low;
Step2S = Step1S*.214;
Step3S = Low + Step2S;
Step1L = High - Low;
Step2L = Step1L*.786;
Step3L = Low + Step2L;

//Then just check if the close is > < the 78.6 value of the candle....

if Close > Step3L then  //go long
If Close < Step3S then  //go short

 

Thanks for the help!