The Fibonacci channel is a technical analysis tool that is used to estimate support and resistance levels based on the Fibonacci numbers. It is a variation of the Fibonacci retracement tool, except with the channel the lines run diagonally rather than horizontally. It can be applied to both short-term and long-term trends, as well as to uptrend and downtrends. Lines are drawn at 23.6, 38.2, 50, 61.8, 78.6, 100, 161.8, 200, 261.8, 361.8 and 423.6 percent, at the discretion of the trader.
How to Calculate a Fibonacci Channel
A Fibonacci channel doesn't require a formula. The channels are drawn at certain percentages of the price move selected by the trader.
What Does a Fibonacci Channel Tell You?
In order to draw a Fibonacci channel, the trader must first determine the trend direction.
FIBOChannels , which is calculated based on the maximum distance between the price and MA