Gate.io AMA - Fibonacci Arcs and Fans | Oct.19th

Q: Last week we had the basic knowledge about Fibonacci. This event we will talk about some other similar tools - Arcs and Fans.

A: Let's go through the basic knowledge first. Here to review of some basic points of Fibonacci.

1.Fibonacci levels are used as guides, possible areas where a trade could develop. The price should confirm prior to acting on the Fibonacci level.

2.The usage of the Fibonacci studies is subjective since the trader must use highs and lows of their choice. Which highs and lows are chosen will affect the results a trader gets.

3.Only measure single way trend.

Q: About the time frame to be used to Fibnacci.

A:

1.They are very popular with financial market technical analysis traders because they can be applied to any time frame.

2.If you used it for a long term time frame of 1M/1W/1D, maybe you will get entries once or twice a week, but it is more stable and safe.

3.If you use it for a short term time frame of 8H/4H/1H/30M, then you will get many entries but you will take more risks.

Q: What is the meaning of Fib Arcs and Fans?

1.Fibonacci Arcs. These are compass-like movements stemming from a high or low that represent areas of support and resistance.

1).Fibonacci Arcs are half circles that extend outward from a line connecting a high and low, called the baseline. These arcs intersect the baseline at the 23.6%, 38.2%, 50%, 61.8%, and 78.6%. ...

2).Fibonacci arcs are typically used to connect two significant price points, such as a swing high and a swing low.

2.Fibonacci Fans. These are diagonal lines created using a high and a low that represent areas of support and resistance.

1).A Fibonacci fan is a method of plotting support and resistance levels based on the ratios provided by the Fibonacci series.

2).Trendlines are drawn at intervals of 23.6, 38.2, 50, and 61.8 percent apart to predict retracements. The Fibonacci ratio, also known as the "golden ratio," is roughly 1.618.

Conclusion:

1.Arcs and Fans are very similar tools that to present areas of support and resistance.

2.Basically these two tools are similar to Fib Retracement. To analyze the price pull back level.

Q: Let's take a look at Fib Arc and Fans.

A:

Fib Arcs

1.Go to Trading View, select a trade pair.

2.Select the Arc tool from the left tool kit.

3.Draw the point from low to high or high to low, according to the trend. This is the same rule as Fib Retracement.

1).From below, we draw from low point 1 to high point 2.

2).The same as Retracement, the pull back touched circle of 0.382, 0.5, 0.618 and 0.786.

3).Compared to Retracement, the circle touched with candlesticks, they call it the resistance. Please see the yellow marked parts.

Fib Fans

Please go to the link below to study how to draw it.

https://www.youtube.com/watch?v=XVI4cxOqobw

1.1/5/8 lines, are for Resistance

2.4/7/11 lines, are for Support

3.2/3/6/9/10, are for Corrections

4.Strong area, line 1-4

5.Middle area, line 5-8

6.Weak area, line 8-11

1.Same as Fib Arcs, select tool from left side Tool Kit.

2.There're three strategies:

1). When the trend is up, and the candle moves down and breaks the support line, the next movement will go down.

2). When the trend is up, and the candle moves down but fails to break the support line, the next movement will move up.

3). When the candle is in the correction line, use the short period trend line to mark the trend.

Q: Let's conclude some points of Arcs and Fans.

A:

Fibonacci Fans, similar to retracements and arcs are used to identify potential support, resistance or reversal points. These metrics assume the move is corrective in nature and that the market will bounce and target these levels.