Fibonacci Retracement & RSI Strategy: Trading Algo with Full Code

Fibonacci Retracement with RSI Filter Strategy [algo_aakash] | Full Code Inside

Combine classic Fibonacci retracement zones with RSI momentum confirmation in this professional-grade trading system. This article introduces a robust strategy that filters price-based Fibonacci signals with oscillator strength for higher-probability entries.

Core Concept Integration

• Traditional Fibonacci retracement levels identify potential reversal zones
• RSI momentum filter confirms entry strength
• Strategy triggers on price-RSI alignment at key Fib levels

Strategy Logic Explained

The system calculates Fibonacci retracement levels from recent swing highs/lows. It combines this with RSI oversold/overbought readings to validate entries:

• Long entries at 61.8% retracement with RSI < 30
• Short entries at 38.2% level with RSI > 70
• Built-in 2% stop loss and 5% take profit rails

Dynamic Level Calculation

Automated swing point detection uses 50-bar range analysis. Retracement levels update continuously based on recent price extremes. RSI (14-period) smooths with 2-period average to reduce false signals. Visual alerts plotted via triangles for clear chart recognition.

Conclusion

This Fibonacci-RSI hybrid strategy offers objective rules for trend retracement plays. By combining support/resistance zones with momentum confirmation, it aims to filter low-quality setups while maintaining favorable risk-reward parameters. Always backtest across multiple instruments and timeframes before live deployment.

//@version=5
// Author: algo_aakash
strategy("Fibonacci Retracement with RSI Filter Strategy [algo_aakash] | Full Code Inside", overlay=true)

// Input Settings
fibLevel1 = input.float(0.382, "Fibonacci 38.2%")
fibLevel2 = input.float(0.618, "Fibonacci 61.8%")
rsiLength = input.int(14, "RSI Period")
lookback = input.int(50, "Swing Lookback Period")

// Swing Point Detection
swingHigh = ta.highest(high, lookback)
swingLow = ta.lowest(low, lookback)
priceRange = swingHigh - swingLow

// Fibonacci Levels
fib382 = swingHigh - (priceRange * fibLevel1)
fib618 = swingHigh - (priceRange * fibLevel2)

// RSI Filter
rsiValue = ta.rsi(close, rsiLength)
rsiMa = ta.ema(rsiValue, 2)

// Entry Conditions
longCondition = ta.crossover(close, fib618) and rsiMa < 30
shortCondition = ta.crossunder(close, fib382) and rsiMa > 70

// Risk Management
stopLoss = strategy.position_avg_price * 0.02
takeProfit = strategy.position_avg_price * 0.05

// Execution Rules
strategy.entry("Long", strategy.long, when=longCondition)
strategy.exit("Exit Long", "Long", stop=close - stopLoss, limit=close + takeProfit)

strategy.entry("Short", strategy.short, when=shortCondition)
strategy.exit("Exit Short", "Short", stop=close + stopLoss, limit=close - takeProfit)

// Visual Signals
plotshape(longCondition, style=shape.triangleup, location=location.belowbar, color=color.green, size=size.small)
plotshape(shortCondition, style=shape.triangledown, location=location.abovebar, color=color.red, size=size.small)

plot(fib382, "38.2% Level", color=color.orange)
plot(fib618, "61.8% Level", color=color.blue)