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

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.

RELATED TERMS
  1. Fibonacci Channel

    A variation of the Fibonacci retracement pattern in which the ...
  2. Fibonacci Time Zones

    An indicator used by technical traders to identify periods in ...
  3. Fibonacci Arc

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

    A term used in technical analysis that refers to areas of support ...
  5. Fibonacci Extensions

    Levels used in Fibonacci retracement to forecast areas of support ...
  6. Fibonacci Numbers/Lines

    Leonardo Fibonacci was an Italian mathematician born in the 12th ...
Related Articles
  1. Trading

    Fibonacci And The Golden Ratio

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

    Advanced Fibonacci Applications

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

    Strategies For Trading Fibonacci Retracements

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

    Taking The Magic Out Of Fibonacci Numbers

    Uncover the history and logic behind this popular trading tool.
  5. Trading

    Using a Fibonacci Retracement

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

    Top 4 Fibonacci Retracement Mistakes To Avoid

    Using Fibonacci incorrectly can have disastrous consequences. Find out which common moves to avoid.
  8. Investing

    Fibonacci: Using Math To Make Right Market Moves

    Use these two original Fibonacci techniques to pinpoint the patterns in stock movements, and the most reliable entry and exit levels.
  9. Trading

    3 Fibonacci Trades For Late Summer

    Fibonacci retracement analysis organizes chaotic price action, highlighting hidden buying and selling opportunities.
  10. Investing

    Using Fibonacci to Analyze Gold (GLD, GC)

    Use Fibonacci studies to analyze gold by picking out hidden harmonic levels that can provide major support or resistance.
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 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 >>
  3. 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 >>
  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. 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 >>
  6. 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 >>
Hot Definitions
  1. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  2. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  3. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  4. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  5. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  6. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
Trading Center