Fibonacci Time Zones


DEFINITION of 'Fibonacci Time Zones'

An indicator used by technical traders to identify periods in which the price of an asset will experience a significant amount of movement. This charting technique consists of a series of vertical lines that correspond to the sequence of numbers known as Fibonacci numbers (1, 2, 3, 5, 8, 13, 21, 34, etc.). Once a trader chooses a starting position (most commonly following a major move) on the chart, a vertical line is placed on every subsequent day that corresponds to the position in the Fibonacci number sequence.

Fibonacci Time Zones

BREAKING DOWN 'Fibonacci Time Zones'

Fibonacci numbers are a sequence of numbers where each successive number is the sum of the two previous numbers. For reasons unknown, these numbers play an important role in determining relative areas where the prices of financial assets experience large price moves or change direction. The four popular Fibonacci studies are arcs, fans, retracements and time zones.

  1. Indicator

    Indicators are statistics used to measure current conditions ...
  2. Chartist

    An individual who uses charts or graphs of a security's historical ...
  3. Retracement

    A temporary reversal in the direction of a stock's price that ...
  4. Fibonacci Numbers/Lines

    Leonardo Fibonacci was an Italian mathematician born in the 12th ...
  5. Fibonacci Arc

    A charting technique consisting of three curved lines that are ...
  6. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
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