Fibonacci Channel

Brief

The section explains how to work with the Add Fibonacci Channel tool.

Details

During a major trend, prices keep moving in the direction of the trend till a reversal occurs. The Fibonacci Channel tool helps determining when such a reversal might occur. On a chart, the Fibonacci Channel tool is drawn as a base channel with several (three by default) retrasement lines running parallel to the channel lines. It looks very much alike the Fibonacci Retracement tool with one major difference: the Fibonacci Retracement lines are always horizontal.
The Fibonacci Channel tool can be used to define support and resistance levels of the market prices. It is often drawn together with the Fibonacci Retracement tool. The intersection points of the tools are considered to be exceptionally strong support or resistance levels.