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Fibonacci Speed/Resistance Arc


Drawing Tools can be applied, moved, and formatted, directly on a chart, providing tremendous flexibility. Many drawing tools allow you to analyze new data on a chart by extending the drawing object to the left or to the right of the chart. You can use them to call attention to any area of a chart you wish.

Description:

This tool allows for detecting the direction and speed of the changes in the current trend based on support/resistance levels from Fibonacci ratios.




Usage:

The Speed/Resistance Arc shows the level a trend correction may appear. In an uptrend, a downside correction usually stops at the higher arc and, if not, prices will probably drop to the lower arc. If that arc is broken, prices will most likely continue down to the beginning of the prior trend. In a downtrend, the breaking of a lower arc shows a possible rise or rally to the higher arc. If a breakout occurs above that arc, the rally may continue to the top of the prior trend.