PHI-Ellipse

AAA

DEFINITION of 'PHI-Ellipse'

An investment tool used in technical analysis that is also known as the Fibonacci ellipse. The Phi Ellipse is used by traders to identify general market trends, in contrast to standard Fibonacci technical tools that attempt to determine resistance and support levels. Once three points are identified on a chart, the phi-ellipse can be drawn.

INVESTOPEDIA EXPLAINS 'PHI-Ellipse'

To draw an phi-ellipse, three points must first be selected: the first one is just an arbitrary point, the second is the peak that occurs after that arbitrary point (indentified by a reversal from the peak). The third point is another reversal back to the original direction of the trend. Once the ellipse is drawn, the line that bisects this ellipse is used to indicate the trend.

RELATED TERMS
  1. Fibonacci Numbers/Lines

    Leonardo Fibonacci was an Italian mathematician born in the 12th ...
  2. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  3. Resistance (Resistance Level)

    A chart point or range that caps an increase in the level of ...
  4. Fibonacci Arc

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

    A term used in technical analysis that refers to areas of support ...
  6. Fibonacci Clusters

    A tool used in technical analysis that combines various numbers ...
Related Articles
  1. Fibonacci And The Golden Ratio
    Active Trading

    Fibonacci And The Golden Ratio

  2. Support And Resistance Basics
    Active Trading Fundamentals

    Support And Resistance Basics

  3. High-Tech Fibonacci
    Trading Systems & Software

    High-Tech Fibonacci

  4. Advanced Fibonacci Applications
    Active Trading

    Advanced Fibonacci Applications

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center