It shows Fibonacci “fan lines” applied to an uptrend in the Euro/U.S. dollar (EUR/USD) uptrend. These lines are drawn by connecting the significant high or low that starts the trend with the key Fibonacci retracement levels for that trend move: You measure the range between a significant low and a significant high, then deduct 38.2 percent and 61.8 percent from the high of the range to calculate downside retracement levels for an uptrend, or add 38.2 percent and 61.8 percent from the low of the range to calculate upside retracement levels for a downtrend.
For example, if a currency pair rallied from 1.5000 to 1.7500, the move is .2500 and the 38.2- and 61.8-percent retracement levels would be 1.7500 - (.2500*.382) = 1.6545, and 1.7500 - (.2500*.618) = 1.5955, respectively. The Fibonacci fan lines would connect the low price of 1.5000 to these two retracement levels. The 50-percent level is usually included with these two ratios.
The primary advantage of Fibonacci fan lines vs. standard horizontal Fibonacci retracement levels is the fans will provide earlier signals.
Subscribe to:
Post Comments (Atom)
Post a Comment