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.

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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. 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 >>
  3. 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 >>
  4. 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 >>
  5. Why is the Fibonacci Retracement important for traders and analysts?

    Find out why traders and analysts in financial markets use Fibonacci retracement to help identify support and resistance ... Read Answer >>
  6. What are the main disadvantages of using Fibonacci Retracements for trading strategies?

    Learn about the disadvantages inherent to the Fibonacci retracement, an indicator built on the Fibonacci sequence used in ... Read Answer >>
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