Fibonacci Arc

Brief

Working with a Fibonacci arc.

Details

Fibonacci arc is drawn by placing a trend line between two extreme points (usually the high and low in a given period). Centered on the second point, three arcs are displayed. The arcs intersect the trendline at 0.382, 0.500 and 0.618 - at the Fibonacci levels. These levels can be considered support and resistance levels.

Note that at the points where the arcs cross, the price data will vary 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 Fibonacci arcs and Fibonacci fans to define support and resistance points where the Fibonacci elements cross.