How do you create a Fibonacci arc?

A Fibonacci arc is constructed by first drawing a trend line between two swing points on a chart. These two points should be between a clear peak and trough on the chart. Once the line is drawn, key Fibonacci levels are placed on the chart at 38.2%, 50%, and 61.8% retracement levels.

What are Fibonacci arcs?

Four arcs are then drawn, measured from the second extreme point, so they intersect the trend line at the Fibonacci levels of 23.6%, 38.2%, 50.0%, and 61.8%.These arcs mark potential support and resistance areas as prices retrace a portion of their move after a decline or an advance.

What is Fibonacci arc trading?

Fibonacci arc trading is done by first identifying the key Fibonacci arc levels. The next step is to monitor how the stock performs at these key levels. If the stock breaks above both a recent price high and an arc resistance level (38.2%, 50% or 61.8%), a buy order should be placed.