What is the Fibonacci fan?
Fibonacci fan is a line that uses fibonacci based on time and price to illustrate the level of support and resistance. Some traders use fibonacci fans and other Fibonacci methods as tools for analyzing support and resistance on financial markets such as stocks, futures and monetary markets. Other fibonacci techniques used by traders may include compensation, arches, extensions and time zones. Fibonacci methods are trying to predict when the trends of the financial market will change. Fibonacci fan fans are usually used three diagonal fibonacci lines. These lines help show key points of support and resistance.
Creating Fibonacci fan graph requires you to draw a trend line between two points on the graph first. Typically, these two points are high and minimum over the set time period. Furthermore, the vertical distance between these two points is divided by three primary Fibonacci ratios - 38.2%, 50%and 61.8%.Each three resulting numbers indicate a level of vertical distance and are included as points on the graph. The three Fibonacci fan lines are then drawn from the point left on the graph on each of the three numbers that represent the primary Fibonacci ratios.
In the graph, the levels of support are a point in which the buyer affects prices and prevents them from falling. On the other hand, the resistance level represents the location at which the seller controls prices and prevents them from growing. The agreement may take place when the buyer and the seller agree to carry out a transaction at a mutually agreed price. Traders generally believe that prices will increase when the levels of support are in the game and fall when the levels of resistance are in motion.
merchants often expect prices if prices on Fibonacci fiber fans fall below the trend line. This decline is expected to continue until the next level of trend is reached. NaopAK, if prices increase to meet the trend line, the trend line is expected to serve as a resistance. If this price is met, the next highest trend line is another level of resistance.
Fan fan fibonacci are not market predictors without reliable. In addition, they often prove to read and interpret for traders. They can also be mapping time consuming. As a result, many merchants use fibonacci fans or other Fibonacci tools in combination with other trends predictions.