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 Retracement

    A term used in technical analysis that refers to areas of support ...
  2. Speed Resistance Lines

    A tool in technical analysis that is used for determining potential ...
  3. Fibonacci Numbers/Lines

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

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

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

    The price level which, historically, a stock has had difficulty ...
Related Articles
  1. Active Trading

    Fibonacci And The Golden Ratio

  2. Trading Systems & Software

    High-Tech Fibonacci

  3. Forex Education

    How To Become A Successful Forex Trader

  4. Options & Futures

    Make Money With The Fibonacci ABC Pattern

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

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

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. 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 ...
  6. Debit Spread

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