Fibonacci Arcs

Refer to the Fibonacci Retracement page.

Calculation Method and Interpretation

Identify on the price chart a period corresponding to a significant trend cycle and draw a line connecting the highest high and lowest low (or vice versa) of that period.

The distance between these two points serves as the basis for calculating the radii of Fibonacci arcs. Typically, three arcs are displayed corresponding to radii of 38.2%, 50%, and 61.8% of this distance from the end point of the identified trend. Circular arcs are drawn for each radius, acting as support and resistance zones.

Shortly after a major trend reversal, "Fibonacci Arcs" define price target levels for the anticipated correction.

Example