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Fibonacci fan is a trading tool that is currently gaining a lot of attention from traders worldwide. This tool can help you provide insights into potential market movements. In this blog post, we will check out the Fibonacci fan trading tool and explore how it can be used effectively on the Pocket Option trading platform.
Understanding Fibonacci Fan
As I said above, the Fibonacci fan is a technical analysis tool that uses a set of trendlines plotted with the help of key Fibonacci ratios mainly 38.2%, 50%, & 61.8% to predict the upcoming Support and Resistance levels graphically. These ratios are derived from the Fibonacci mathematical sequence where each number is the sum of the two preceding ones.
How to find and set Fibonacci fan on the Pocket Option
To find the Fibonacci fan on the Pocket Option follow the steps given below
Step 1> Login to your Pocket Option account. In case you don’t have one click here.
Step 2> Click on the drawing tools button at the top of the page.
Step 3> Search for the Fibonacci fan name in the list and click the name.
Step 4> Make necessary amendments based on nature your trading nature. You can even change the indicator line colour and once you are done click apply.
How to use Fibonacci fan on Pocket Option
Fibonacci fans are a trading tool used to draw the Support and Resistance levels in the Pocket Option chart.
Once we have applied the Fibonacci fan on the Pocket Option chart, Next, you need to find the perfect bottom and the top for Support and Resistance levels.
As you can see above, I have found a perfect bottom in the price chart now, I need to stretch it below the bottom and this will create our Support level.
Similarly, You need to find the two candle tops at the same distance and stretch above the same for the Resistance level.
How to use Fibonacci Fan on Pocket Option
Trading with Fibonacci Fan is not a big deal you can use the trading tool in multiple ways however the most popular ways are
1> Solo Fibonacci Fan: You can use a solo Fibonacci Fan on the Pocket Option chart. Once you have spotted a perfect bottom and top you need to next stretch it and create support and resistance level with the same. Now, when the candles are touching the support level it signals an upcoming bullish trend and here you can place a buy trade similarly, when the candles are touching the resistance level it signals an upcoming bearish trend and here you can place a sell trade.
2> Combine with trend indicators: You can even combine the Fibonacci Fan with other trend indicators like CCI. When the candles touch the support level plus the CCI line is near -100 it signals an upcoming bullish trend similarly when the candles touch the resistance level plus the CCI line is above 100 it signals an upcoming bearish trend.
