Fibonacci Arcs, Fans, and Retracements can be drawn on any chart by clicking the drawing tools button at the top of the chart, then clicking on a specific tool. Once selected, your mouse cursor will turn into a cross-hair. Fibonacci studies are displayed by first drawing a trendline between two extreme points, for example, a trough and opposing peak.
The Fibonacci drawing tools in TeleChart are based on the Fibonacci summation series. The series is the sum of the previous two numbers 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144 to infinity. The numbers have many mathematical relationships which are found throughout nature. Many traders have applied these relationships stock charts to help interpret the natural fluctuations of stock prices. The relationships found in this series of numbers are used to plot Fibonacci Arcs, Fans, and Retracements in TeleChart.
Fibonacci Arcs, Fans, and Retracements are all plotted by initially selecting two points on the chart, a start point and an end point. These two points are often two extreme points on the chart like a high and low. Once this is done, the Arcs, Fans, or Retracement Lines are then plotted. Each of them is described below.
Once you have established your start and end points, the Fibonacci arcs are then drawn. The arcs are centered around the first point chosen and spaced at intervals of 23.6%, 38.2%, 50%, 61.8%, 100%, 161.8%, and 261.8% of the distance between the two points chosen.
Once you have established your start and end points, an imaginary line is then plotted, running vertically from your end point to the price of your start point. The Fan lines are then drawn from your start point outward and intercept the imaginary vertical line at intervals of 23.6%, 38.2%, 50%, 61.8%, 100%, 161.8%, and 261.8% of the distance between the price of the start point and the end point.
Once you have established your start and end points, horizontal retracement lines are then drawn. The lines are spaced from the price of the end point toward the start point at intervals of 23.6%, 38.2%, 50%, 61.8%, 100%, 161.8%, and 261.8% of the distance between the prices of the two points.
To edit or delete Fibonacci Arcs, Fans, or Retracements right-click on the start point or end point and choose edit or delete.