InvestorQ : How exactly does the Fibonacci arc work as a price indicator and how is it interpreted?
shrinidhi Rajan made post

How exactly does the Fibonacci arc work as a price indicator and how is it interpreted?

Answer
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Riya Dwivedi answered.
1 year ago


Fibonacci arcs are used to meaningfully anticipate support / resistance as price approaches Fibonacci Arcs. The following is the sequence of arcs that you must consider for your calculation of Fibonacci levels for trading and here how the calculation goes:

Base Line: A line from point A to point B

First Arc: Radius = 23.6% of base line

Second Arc: Radius = 38.2% of base line

Third Arc: Radius = 50% of base line

Fourth Arc: = 61.8% of base line.

These are used as a more smoothened version of the Fibonacci series to get appropriate support and resistance levels. The Fibonacci arc retracements are technically more refined and sophisticated than the plain Fibonacci numbers.