The AutoFib Pro is a useful tool that automatically calculates and plots Fibonacci Retracement levels. Each period, the AutoFib evaluates the price history over a user-specified number of bars. It then finds the extreme high and extreme low points for that window and then uses those values to establish 5 levels based on Fibonacci’s golden ratio.
This provides a simple visual representation of support and resistance levels. The tool’s automated nature means that the levels are dynamically adjusted to account for new extreme highs and lows, as well as irregular movements.
When the bands are located closely together, the security is experiencing high volatility. A large gap between the top and bottom levels signify a price outbreak. When the price crosses the middle 50% level, it is likely (but not guaranteed) to continue in that direction.