Fibonacci Fan
The Fibonacci Fan is constructed by drawing a trendline between two significant price points, usually a low and a high during a trend. Traders use the Fibonacci Fan to determine how steep or gradual a correction might be during a trend. Conversely, if the price breaks through all fan lines, it could signal a weakening trend or a potential reversal.
The fan lines are particularly useful because they adjust over time, unlike horizontal Fibonacci retracement levels. This makes them effective for analyzing dynamic, trending markets where angles of movement are important.
Fibonacci Arcs
Fibonacci Arcs work slightly differently. These are formed by selecting a trendline between two significant price points, similar to the fan. These arcs expand outward and upward or downward, forming curved support and resistance levels and hence arcs.
The idea behind Fibonacci Arcs is that price movements may not only be linear but can also follow curved paths due to shifts in market volatility and momentum. When price touches one of the arcs, it may act as either support or resistance, depending on the trend direction. Arcs can be especially useful when price moves in a consolidating or ranging fashion before breaking out.
Using Fan and Arcs Together
When they are both combined, Fibonacci Fan and Arcs create a grid-like structure that provides a more complete picture of potential price movement zones. These overlapping levels of support and resistance help traders make more informed decisions regarding entry points, stop-loss placement, and profit targets.
In this course, you will learn all about the Fibonacci fans and arcs, you’ll learn the basis behind them, and how to draw the lines and predict the price retracements. You will understand how they each can help you visualize the potential path of price movements in both straight and curved forms, offering a deeper understanding of market dynamics. You’ll also learn how they work in volatile markets and how to use them in conjunction with other analysis tools to anticipate more market trends and behaviour. Everything that you will need to know when you come to analyzing the charts and making your way through the Forex markets.
