Fibonacci Fan

AAA

DEFINITION of 'Fibonacci Fan'

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

Fibonacci Fan

INVESTOPEDIA EXPLAINS 'Fibonacci Fan'

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.

RELATED TERMS
  1. Fibonacci Numbers/Lines

    Leonardo Fibonacci was an Italian mathematician born in the 12th ...
  2. Resistance (Resistance Level)

    A chart point or range that caps an increase in the level of ...
  3. Retracement

    A temporary reversal in the direction of a stock's price that ...
  4. Support (Support Level)

    The price level which, historically, a stock has had difficulty ...
  5. Fibonacci Arc

    A charting technique consisting of three curved lines that are ...
  6. Fibonacci Retracement

    A term used in technical analysis that refers to areas of support ...
Related Articles
  1. Fibonacci And The Golden Ratio
    Active Trading

    Fibonacci And The Golden Ratio

  2. High-Tech Fibonacci
    Trading Systems & Software

    High-Tech Fibonacci

  3. How To Become A Successful Forex Trader
    Forex Education

    How To Become A Successful Forex Trader

  4. Make Money With The Fibonacci ABC Pattern
    Options & Futures

    Make Money With The Fibonacci ABC Pattern

Hot Definitions
  1. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  2. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  3. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  5. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  6. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
Trading Center