# Fibonacci Ribbon {% hint style="info" %} The biggest problem with Moving Averages (EMA, SMA, WMA...) are the false breaks. That's why I developed this tool which follows the price trend and "breaks" when the price is accompanied by a large volume. \ This allows to limit the false breaks. The particularity of the 2 central Moving Averages that form the Fibonacci channel, is that they never cross. Be careful, "limit" does not mean "delete", the price can deceive any indicator. {% endhint %} The Fibonacci ribbon is a moving average ribbon based on the Fibonacci sequence.

The calculation that I developed allows to display a series of 24 Moving Averages very restrictive in their amplitude but very reactive to price movements. They can be used like any other moving average (SMA, EMA, WMA, HullMA, etc.) ### Short Moving Averages The Short Moving Averages are used to know the short term trend, you can use the crosses to determine if the asset is in trend or not (crosses between 2 MA or a close that crosses a MA). Like all indicators, the range phases are used to Accumulate or Distribute according to Wyckoff but also to fool the indicators since they are almost all averaged. The Short Moving Averages are used to know the short term trend, you can use the crosses to determine if the asset is in trend or not (crosses between 2 MA or a candle closing through a MA). Like all indicators, the range phases are used to Accumulate or Distribute according to Wyckoff but also to fool the indicators since they are almost all averaged. Now I prefer to use different crosses depending on the time unit. The smaller the unit of time, the more I will choose a pair of Long MAs, for example: the Short MA 4 and 7 in Daily and the Short MA 10 and Long MA 5 in 30 Minutes. Of course these are personal preferences. In Wyckoff theory, I will instead use a single Moving Average (always based on the time unit of the manipulation). For example in a Wyckoff Distribution, we know that the AR or SOW as well as the movement following the TEST of the UT or UTAD, cause strong selling volumes. The price must therefore break the Moving Average or Fibonacci channel with force.

Distribution before the FTX crash. Circled in white: the short volume that breaks the MA and the Fibonacci Channel

As usual, you have to find what works best for you! ### The Fibonacci Channel

As you can see from the two images above, the Fibonacci channel serves as support and resistance. It will be broken when the volume is high and the trend resumes. It is composed of the Moving Average 12 Short and Long.

The Fibonacci channel allows you to see the trend of an asset at a glance. However, it needs a large number of candles to perform its calculations and display on your charts. ### Settings

In the settings you can choose: * To activate or not all the short and long Moving Averages, * To display or not the Fibonacci channel (which corresponds to the twelfth short and long moving averages), * Define a line width, * Choose your colors. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://lambot-web3.gitbook.io/english-documentation-lambot-trading/indicateurs-de-lambot-trading/fibonacci-ribbon.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.