For an explanation of Fibonacci retracements, please see the page “Fibonacci retracements.”

The Fibonacci fan is a three-line study that determines forward areas of support where a price decline may be stopped, or areas of resistance, where prices may stall.

To create Fibonacci fan lines:

1. Identify two extreme points (highest-high and lowest-low) to be used for Fibonacci fan lines.
2. Add a Fibonacci retracement to the chart on the two points that you select.
   To add the Fibonacci retracement lines:
   a. Right-click in the blank area of a chart.
   b. Highlight pointer tools in the menu.
   c. Select Fibonacci > Retracement from the pointer tool menu.
   d. Select the starting bar value for the Fibonacci retracement by placing the pointer tool on one of the extreme points, then left-click.
   e. Place the pointer tool on the second extreme point and then left-click.
3. Add the vertical cursor line to the chart and park it on the second extreme point.
4. To add the vertical cursor:
   a. Left-click in the time scale of the chart.
   b. Park the vertical cursor by placing it on the bar of the second extreme point, then left-click.
   The vertical cursor is the reference line used to add trendlines. The trendlines intersect the Fibonacci retracement lines at 38.2%, 50%, and 61.8% of the Fibonacci retracement range from the first and second extreme points.
5. Three trendlines are then drawn from the first extreme point so they pass through the vertical reference line (vertical cursor) at the Fibonacci levels of 38.2%, 50.0%, and 61.8%. 
   To add trendlines:
   a. Left-click in the blank area of the chart.
   b. Highlight pointer tools in the menu.
   c. Left-click on trend.
   d. Plot the trendline by placing the pointer tool on the first extreme point of the Fibonacci retracement – the zero line of the Fibonacci retracement –-- then left-click.
   e. Move the trend tool to the 100% line of the Fibonacci retracement line, so that the trendline intersects this line and the vertical reference line at the 38.2% line, then left-click.
   f. Repeat steps d and e for the 50% trendline and the 61.8% trendline.
   The Fibonacci fan lines incorporate time and price to create rising support and resistance lines based on the Fibonacci retracement levels. Traders watch how the price action behaves at the fan lines. If the market retraces to a fan line and stops, then the correction could be over. If the fan line does not hold, then the market may trade to the next fan line.