Fibonacci Fan? How do you trade with it? | Forex Factory

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Fibonacci Fan? How do you trade with it?

  • #1
  • First Post: Jul 6, 2008 7:33am Jul 6, 2008 7:33am
There are many trading techniques and methods traders use to make trading decisions.

The one I would like to address here in this thread, is the Fibonacci Fan:

On an '' up '' Fibo Fan; do you short when price breaks below the 61.8 Fibo trend line, or do you wait for a breach of the 0.707 level to short? Do you place your Stop loss at the previous Swing high? Or, would you even consider taking a long, at lets say, the 0.786 or 0.886 level? (all above vice versa for a '' down '' Fib)

I would be interested to hear how you take advantage of this tool.
  • #2
  • Jul 6, 2008 1:37pm Jul 6, 2008 1:37pm
Quoting FX1999
There are many trading techniques and methods traders use to make trading decisions.

The one I would like to address here in this thread, is the Fibonacci Fan:

On an '' up '' Fibo Fan; do you short when price breaks below the 61.8 Fibo trend line, or do you wait for a breach of the 0.707 level to short? Do you place your Stop loss at the previous Swing high? Or, would you even consider taking a long, at lets say, the 0.786 or 0.886 level? (all above vice versa for a '' down '' Fib)

I would be interested to hear how you take advantage of this tool.

You don't trade with a fib fan, you use it for analysis then make your trade based off of your conclusions.
Just Trade It
  • #3
  • Jul 6, 2008 1:59pm Jul 6, 2008 1:59pm
FX1999,

Fib fans are based on squaring a range, most traders use them as possible support/resistance but the lines projected should act as time price points, price should react when intersected, note the reaction can be reversal, acceleration or consolidation.

A good discussion on fib fans and arcs is here:

http://www.forexfactory.com/showthread.php?t=9040

fwiw,
  • #4
  • Jul 7, 2008 1:33am Jul 7, 2008 1:33am
Quoting Big Wave Rider
You don't trade with a fib fan, you use it for analysis then make your trade based off of your conclusions.

Okay thank you, I hear you, of course; the question remains though: How do you arrive to your conclusions? Or better said, leaving the fundamental side of the analysis out of the equation for the moment, wouldn't you agree that it is by far a better idea to use this dynamic trend line tool as a trigger for your trades rather than any other sort of Moving Average crosses, RSI, MACD etc. ?
  • #5
  • Jul 7, 2008 8:37am Jul 7, 2008 8:37am
Quoting auxesis
FX1999,

Fib fans are based on squaring a range, most traders use them as possible support/resistance but the lines projected should act as time price points, price should react when intersected, note the reaction can be reversal, acceleration or consolidation.

A good discussion on fib fans and arcs is here:

http://www.forexfactory.com/showthread.php?t=9040

fwiw,
With regards to the reaction being a reversal, accelerating or a consolidating one;

I use the Fib Fan tool more as a ' dynamic ' trend line tool. If price moves over the 0.707 level which would be a trend line break (up or down trend), that would trigger a trade signal, with profit targets being in the lower part of the fib fans ie. the 0.886 or sometimes the 1.0 level (the previous high/ low).
  • #6
  • Feb 28, 2010 5:43am Feb 28, 2010 5:43am
again and again CT magazine well explained!! check this out
  • #7
  • Mar 4, 2010 3:54am Mar 4, 2010 3:54am
actually its a pretty useful tool even on M1 chart... take most recent high and low..then retrace from high to high and from low to low... (better to take H4retrace to current high/low and then to see what's happening on M15)
provides good support/resistance...test to see.
  • #8
  • Mar 4, 2010 3:56am Mar 4, 2010 3:56am
What's with the thread necromancy these days lol.
  • #9
  • Mar 4, 2010 4:14am Mar 4, 2010 4:14am
h4 -> 15m example
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  • #10
  • Mar 4, 2010 8:56am Mar 4, 2010 8:56am
and here what u got... ok call it luck or whatever u call it ... it works anyway...
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  • #11
  • Mar 6, 2010 5:44pm Mar 6, 2010 5:44pm
good job mistersimple. u use it every day?
  • #12
  • Mar 6, 2010 7:59pm Mar 6, 2010 7:59pm
If you are going to draw H-H or L-L then that is basically the same as using a trendLine but not the purpose fib fan lines were developed for.

If it works don't fix it but the same can be said for any random technique if the proper m/m is used.
  • #13
  • Mar 6, 2010 8:02pm Mar 6, 2010 8:02pm
care to explain what they were developed for?
  • #14
  • Edited 8:30pm Mar 6, 2010 8:14pm | Edited 8:30pm
They were developed to plot retracement levels (same as the standard fib retracement tool) using High to Low or vice versa Low to High but factoring passage of time as well.

I don't like them myself or fib arcs for that matter.

I prefer standard fib retracements and Gann Fan lines.

Here is the same EJ 15 timeframe chart as the one previously posted.

Keep in mind this is looking back in time. I did not catch these possible trade points.
Attached Image (click to enlarge)
Click to Enlarge Name: EJ15.png Size: 65 KB
  • #15
  • Mar 7, 2010 4:26am Mar 7, 2010 4:26am
sun you re 100% right, they were not designed for that but it works anyway...
sim yes..but with caution
  • #16
  • Mar 7, 2010 8:22am Mar 7, 2010 8:22am
Quoting SunTrader
They were developed to plot retracement levels (same as the standard fib retracement tool) using High to Low or vice versa Low to High but factoring passage of time as well.

I don't like them myself or fib arcs for that matter.

I prefer standard fib retracements and Gann Fan lines.

Here is the same EJ 15 timeframe chart as the one previously posted.

Keep in mind this is looking back in time. I did not catch these possible trade points.
But in practice they would still be used as trendlines anyway??

Gann fan lines sound interesting
  • #17
  • May 19, 2010 2:42pm May 19, 2010 2:42pm
With reference to an interest in Fibonacci Fans, I have used these fans to measure the trends for EURUSD. The fans consider the rising and falling nature of the market, with powerful winds blowing both north and south.

To increase the calibration, I have added additional Fibonacci ratios, 23.6 and 76.4, to the indicator's Fibo Levels properties settings.

To differentiate the trends, I have used Green for rising trends, and Indian Red for falling trends.

Over time, the Fibonacci Fans can create an image of the way both winds are blowing, and perhaps how strong they are. A type of market weather map.

The Fibonacci Fans, like all indicators, are for measurement only. They can not predict the future.
Attached Image(s) (click to enlarge)
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  • #18
  • May 19, 2010 3:05pm May 19, 2010 3:05pm
Nice, observing any currently?
  • #19
  • Jul 9, 2015 9:39am Jul 9, 2015 9:39am
i'm little bit a fan of fibonacchi fan. when googling about fractal i accidentally found this indicator. this indicator use fractal channel and fibonacchi fan. many thanks for who ever built this indicator.. maybe someday he share his techniques
Attached File(s)
File Type: mq4 rvmFractalsLevel.mq4   16 KB | 1,022 downloads
  • #20
  • Jul 14, 2015 9:53pm Jul 14, 2015 9:53pm
i learn fibo fan breakout from http://stockcharts.com/school/doku.p...:fibonacci_fan
Attached Image (click to enlarge)
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