Don’t waste your time – keep track of how NFP affects the US dollar!

Thank you for visiting our website

The ASIC policy prohibits us from providing services to clients in your region. Are you already registered with FBS and want to continue working in your Personal area?

Personal area

Facebook like

Fibonacci Fan

Information is not investment advice

Fibonacci fan is a tool that will help you analyse trends.

Fibonacci fans are sets of trendlines drawn from a high or a low of the price chart through a set of points dictated by Fibonacci retracements. Just like with Fibonacci retracement, you need to choose the tool and connect a swing high and a swing low with a base line. 

Then an ‘invisible’ vertical line, equal to the vertical distance between the high and the low, is drawn from the second extreme point to the level of the first extreme point. Three trend lines are then drawn from the first extreme point, so they pass through the invisible vertical line at the Fibonacci levels of 38.2%, 50.0%, and 61.8%.

20.png

Fibonacci fan lines can act as support or resistance, pinpointing areas at which the price may reverse. As soon as a correction starts, the Fibonacci fan will allow you to see the areas you should pay special attention to. 

  1. Corrections (pullbacks) to 38.2% Fibonacci are considered shallow and point at the continuation of the main trend. 
  2. A pullback to 50% is moderate and can be observed quite often.
  3. A correction to the so-called ‘golden ratio’ of 61.8% is more rare, but this level of support/resistance will be the strongest of the three.

Notice that because of the fan’s properties, the further out the lines extend (in time), the more sensitive they are to the exact placement of the two marker points. This means a small change in the placement of either of the marker points can result in large movements further out in the extension lines. The fan usually becomes less accurate the further out it extends. When the price is no longer responding to the support or resistance areas of the fan, it is disregarded (this can happen when it extends outside of the active chart area).

Sometimes technical analysts plot several Fibonacci fans,  using different waves of the prices. This allows one to place potential reversal areas of the price with greater precision.

Latest news

Oil Reached 2018 Highs, German Elections Affect Euro

Commodities (iron ore, oil) and commodity-linked currencies (AUD, CAD) surged. West Texas Intermediate has reached $75 a barrel, while Brent rose to the highest mark since October 2018.

What Will Move the Market on September 27 – October 1?

Although Jerome Powell’s speech sounded hawkish on Wednesday, September 22, markets did not get scared and the main stock indices got bought back…

Turkey has decreased interest rates, but is it a buy?

Turkey’s central bank governor was at a crossroads: to hold interest rates and take a risk to be fired like it was for three governors before him, or to comply with the president, to cut rates, and to risk the market. Let’s find out, how to react to the rate cut.

Be on top of your game

Got questions? FBS Oceania Customer Support is ready to help!

Contact us via email at support@fbsaustralia.com

or

Start Live Chat