Fibonacci Arc

Brief

The section describes how to work with the Fibonacci Arc tool.

Details

Fibonacci Arc is drawn by placing Trend Line between two extreme points on a chart (usually trough and peak or peak and trough) and three arcs centered around the second point of Trend Line. The arcs intersect Trend Line at Fibonacci Levels of 0.382, 0.500, and 0.618. Traders can use these Levels as support and resistance levels or in combination with some other tools.

Note that at the points where the arcs intersect Trend Line, the price data varies depending on the scaling of the chart because the arcs are drawn so that they are circular relative to the computer screen.

Traders usually draw both the Fibonacci Arc and Fibonacci Fan tools to define support and resistance points at their intersection.