Fibonacci Channel

DEFINITION of 'Fibonacci Channel'

A variation of the Fibonacci retracement pattern in which the trendlines run diagonally rather than horizontally. These channels are used to estimate areas of support and resistance in the same way as the horizontal Fibonacci retracement levels.

BREAKING DOWN 'Fibonacci Channel'

Many traders use the lines drawn by the Fibonacci channel in combination with other support and resistance levels found by other indicators. One common technique is to combine the horizontal Fibonacci retracement levels with the lines established by diagonal Fibonacci channels.

RELATED TERMS
  1. Fibonacci Retracement

    A term used in technical analysis that refers to areas of support ...
  2. Fibonacci Fan

    A charting technique consisting of three diagonal lines that ...
  3. Fibonacci Clusters

    A tool used in technical analysis that combines various numbers ...
  4. Horizontal Channel

    Using trendlines to connect variable pivot highs and lows shows ...
  5. Fibonacci Extensions

    Levels used in Fibonacci retracement to forecast areas of support ...
  6. Price Channel

    The price action contained between two parallel lines in a trend. ...
Related Articles
  1. Trading

    Strategies For Trading Fibonacci Retracements

    Investopedia explains Fibonacci retracements--based on the elegant "golden" ratio--and how the levels are derived.
  2. Trading

    Advanced Fibonacci Applications

    Extensions, clusters, channels and more! Discover new ways to put the "golden ratio" to work.
  3. Trading

    Top 4 Fibonacci Retracement Mistakes To Avoid

    There are common mistakes traders make when applying Fibonacci retracements to foreign exchange markets. Here are four well-known errors to avoid.
  4. Trading

    Top 4 Fibonacci Retracement Mistakes To Avoid

    Using Fibonacci incorrectly can have disastrous consequences. Find out which common moves to avoid.
  5. Markets

    Using a Fibonacci Retracement

    The Fibonacci retracement is the potential retracement of a financial asset's original move in price.
  6. Trading

    Channeling: Charting A Path To Success

    Find out how to build these charts showing buy, sell, stop-loss and take-profit points, and even estimate length of trade.
  7. Trading

    Fibonacci And The Golden Ratio

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

    What is Horizontal Analysis?

    Horizontal analysis compares a company’s balance sheet or income statement over two or more accounting periods.
  9. Investing

    What's a Horizontal Merger?

    A horizontal merger occurs when companies within the same industry merge.
  10. Trading

    Taking The Magic Out Of Fibonacci Numbers

    Uncover the history and logic behind this popular trading tool.
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 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 >>
  3. What is a common strategy traders implement when using Fibonacci Retracements?

    Learn some of the most common trading strategies that traders use in relation to the key support and resistance Fibonacci ... Read Answer >>
  4. How do I use Fibonacci Retracements to create a forex trading strategy?

    Learn how to use Fibonacci retracements as part of an overall forex trading strategy. Fibonacci levels are carefully watched ... Read Answer >>
  5. What are some of the more common Fibonacci retracements?

    Examine the basic Fibonacci retracement levels, and learn how key Fibonacci levels are used by traders to identify potential ... Read Answer >>
  6. What are the alert zones in a Fibonacci retracement?

    Discover more about the Fibonacci number sequence, and specifically about the key Fibonacci retracement alert levels most ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center