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.
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BREAKING DOWN '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.
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RELATED FAQS

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 >> 
What is Fibonacci retracement, and where do the ratios that are used come from?
Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Answer >> 
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 >> 
Why is the Fibonacci Retracement important for traders and analysts?
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How reliable is the Fibonacci retracement in predicting stock behavior?
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