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The Fibonacci Fan is a charting technique consisting of a trend line plus three diagonal lines that use Fibonacci ratios (38.2%, 50%, 61.8%) to help identify key levels of support and resistance.
The first trend line is drawn between the lowest low and highest high during the plotting period. The other three trend lines are drawn from the first extreme point to x-positions which are equivalent to the x-position of the second extreme point and y-positions which are a set percentage of the difference between the y-positions of the first and second extreme points (61.8%, 50%, 38.2%).
The Fibonacci Fan lines are used to visualize support and resistance levels.
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This glossary post was last updated: 22nd March, 2020 | 1 Views.