Phi Ellipses

AAA

DEFINITION of 'Phi Ellipses'

A Fibonacci trading tool used to aid investors in indentifying price movements. Essentially, using this model, investors attempt to buy high and sell low. One of its main uses is to indentify the underlying structures of price movements by analyzing the changing shape of the ellipse. The Phi Ellipse is normally drawn by a computer program due to its complexity.

INVESTOPEDIA EXPLAINS 'Phi Ellipses'

Generally speaking, a phi ellipses is used to detect price patterns so investors are better capable of forecasting pricing moves, and therefore, able to detect when a buy or sell is in order. These patterns found in the ellipses have practical application to many trading forums, such as Forex trading platforms.

RELATED TERMS
  1. Price Action

    The movement of a security's price. Price action is encompassed ...
  2. Forex Charting Software

    An analytical, computer-based tool used to help currency traders ...
  3. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  4. Fibonacci Channel

    A variation of the Fibonacci retracement pattern in which the ...
  5. Pattern

    In technical analysis, the distinctive formation created by the ...
  6. Standard & Poor's - S&P

    The world's leading index provider and the foremost source of ...
Related Articles
  1. Active Trading

    Fibonacci And The Golden Ratio

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

    3 Technical Tools To Improve Your Trading

    Find out how volume, the Aroon indicator and Fibonacci numbers can improve your profits.
  3. Trading Systems & Software

    High-Tech Fibonacci

    Fibonacci developed this system in the Middle Ages. See how it can provide accuracy without sacrificing readability.
  4. Forex Education

    Using Double Tops And Double Bottoms In Currency Trading

    Find out how to apply the two most common price reversal patterns to your trading.
  5. Options & Futures

    Make Money With The Fibonacci ABC Pattern

    We break down this indicator into simple, easy-to-understand pieces so you can profit.
  6. Active Trading

    Advanced Fibonacci Applications

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

    Taking The Magic Out Of Fibonacci Numbers

    Uncover the history and logic behind this popular trading tool.
  8. Stock Analysis

    A Trader's Look at the S&P 500

    Moving averages are sending an important signal, and it's probably not what you think.
  9. Chart Advisor

    Is Now the Time to Invest in North America?

    Bullish chart patterns across the North American markets suggest that now might actually be a wise time to allocate closer to home.
  10. Chart Advisor

    These Oil Service Stocks Are Ready For A Move Higher

    In the oil services sector, active traders have been trying hard to establish a floor and the double bottom pattern that is appearing on the chart suggests that a short-term reversal could be ...

You May Also Like

Hot Definitions
  1. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  2. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  4. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  5. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  6. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
Trading Center