Fibonacci Fan

Fibonacci Fan

A charting technique consisting of three diagonal lines that use Fibonacci ratios to help identify key levels of support and resistance.

Notes:

Fibonacci fans are created by first drawing a trendline through two points (usually the high and low in a given period), and then by dividing the vertical distance between the two points by the key Fibonacci ratios of 38.2%, 50% and 61.8%. The result of these divisions each represent a point within the vertical distance. The three 'fan' lines are then created by drawing a line from the leftmost point to each of the three representing a Fibonacci ratio.

See also: Fibonacci Arc, Fibonacci Numbers, Support, Resistance, Retracement