How to Code a Market Pattern in TradingView
Coding the 1.618 Market Pattern in TradingView
Fibonacci ratios are a huge part of trading. They are found in certain patterns and are used as retracements and projections. This article presents a simple pattern on the RSI which uses a Fibonacci ratio to detect a short-term reversal move using certain conditions.
Presenting the 1.618 Pattern
The 1.618 is a simple pattern composed of four points in time. Similar to the ABCD pattern discussed in previous article, the 1.618 pattern signals a short-term reversal. The difference between the two patterns is that the CD leg is 1.618x the AB leg (as opposed to the ABCD pattern where both legs are equal).
The pattern is applied on the 13-period RSI with bullish signals validated when the pattern appears while the RSI is below 40. In contrast, bearish signals are validated when the pattern appears while the RSI is above 60.
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