Fibonacci Fans – How Traders Use Them To Construct Support & Resistance Trendlines

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Fibonacci Fans use Fibonacci ratios based on time and price to construct support and resistance trendlines; also, Fibonacci Fans are used to measure the speed of a trend’s movement, higher or lower.

  • If prices move below a Fibonacci Fan trendline, then price is usually expected to fall further until the next Fibonacci Fan trendline level; therefore, Fibonacci Fan trendlines are expected to serve as support for uptrending markets (see: Support & Resistance).
  • Likewise, in a downtrend, if price rises to a Fibonacci Fan trendline, then that trendline is expected to act as resistance; if that price is pierced, then the next Fibonacci Fan trendline higher is expected to act as resistance.

The chart below of the S&P 500 exchange traded fund (SPY) shows an uptrend that retraced to the 38.2% Fibonacci Fan:

fibonacci fans

The Fibonacci ratio is also used to predict areas of time in which price might change course; Fibonacci Time Extensions are discussed next.

How to Get Started Trading

If you are interested in trading using technical analysis, have a look at our reviews of these regulated brokers available in to learn which charting & analysis tools they offer:

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 73.90%-89.00% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Further Reading

Learn more about technical analysis indicators, concepts, and strategies including Momentum, Elliot Waves, Market Thrust, Moving Averages, and more Fibonacci Patterns.

Also see our guides on Forex, Crypto and Option brokers to find out which tools brokerages offer their clients.

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