Fibonacci Arc

Loading the player...

DEFINITION of 'Fibonacci Arc'

A charting technique consisting of three curved lines that are drawn for the purpose of anticipating key support and resistance levels, and areas of ranging.



Fibonacci Arc

BREAKING DOWN 'Fibonacci Arc'

Fibonacci arcs are created by first drawing an invisible trendline between two points (usually the high and low in a given period), and then by drawing three curves that intersect this trendline at the key Fibonacci levels of 38.2%, 50% and 61.8%. Transaction decisions are made when the price of the asset crosses through these key levels.

RELATED TERMS
  1. Fibonacci Fan

    A charting technique consisting of three diagonal lines that ...
  2. Speed Resistance Lines

    A tool in technical analysis that is used for determining potential ...
  3. Arc Elasticity

    The elasticity of one variable with respect to another between ...
  4. Accounts Receivable Conversion ...

    A process that allows paper checks received in payment for an ...
  5. Normal Yield Curve

    A yield curve in which short-term debt instruments have a lower ...
  6. Flat Yield Curve

    A yield curve in which there is little difference between short-term ...
Related Articles
  1. Active Trading

    Fibonacci And The Golden Ratio

    Discover how this amazing ratio, revealed in countless proportions throughout nature, applies to the financial markets.
  2. Professionals

    Yield Curve Risk

    CFA Level 1 - Yield Curve Risk. Learn how yield curve risk can affect your bond portfolio and how the various shifts in the yield curve relate to interest-rate risk.
  3. Professionals

    Yield Curves

    CFA Level 1 - Yield Curves. Learn how governments can influence short and long-term interest rates. Discusses the various shapes of yield curves and how they are formed.
  4. Bonds & Fixed Income

    Yield Curve

    Learn more about how this curve is used to predict changes in economic output and growth.
  5. Investing

    Trade Bond ETFs Using Yield Curves

    Different types of yield curves provide important insights for trading bond-based securities.
  6. Professionals

    Yield Curve

    Yield Curve
  7. Professionals

    Yield Curves

    FINRA/NASAA Series 65: Section 8 Yield Curves. In this section normal, inverted and flat yield curves and yield spreads.
  8. Technical Indicators

    Strategies For Trading Fibonacci Retracements

    Investopedia explains Fibonacci retracements--based on the elegant "golden" ratio--and how the levels are derived.
  9. Chart Advisor

    Watch for Short-term Trendline Breaks in These Stocks (MDLZ, VLO)

    When these short-term trendlines break, the recent rally in these stocks is likely over.
  10. Fundamental Analysis

    Understanding Term Structure of Interest Rates

    The term structure of interest rates is a common method of valuing bonds.
RELATED FAQS
  1. How can a swing trader use a Fibonacci retracement?

    Learn how swing traders can use Fibonacci retracements to identify areas of support and resistance, as well as entry and ... Read Answer >>
  2. How can the yield curve help me make investment decisions?

    Learn about the yield curve, and discover why this chart is an important economic indicator. How do Treasury bond yields ... Read Answer >>
  3. How reliable is the Fibonacci retracement in predicting stock behavior?

    Learn why the reliability of the Fibonacci retracement indicator is debatable, and how the indicator is used to identify ... Read Answer >>
  4. Why are the term structure of interest rates indicative of future interest rates?

    Learn why economists believe the term structure for interest rates reflects investor expectations for future interest rates ... Read Answer >>
  5. What is the current yield curve and why is it important?

    Understand what the current yield curve represents, and learn how market analysts commonly interpret various changes in the ... Read Answer >>
  6. What is the difference between term structure and a yield curve?

    Understand the difference between the term structure of interest rates and a yield curve, if any. Learn what the yield curve ... Read Answer >>
Hot Definitions
  1. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  6. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
Trading Center