Fibonacci Channel

The Fibonacci channel is a technical analysis that used to estimate support and resistance levels based on the Fibonacci levels and help traders make transaction decisions. Fibonacci channel is a variation of the Fibonacci retracement tool, with parallel retracement lines running diagonally across a price chart instead of horizontal trendlines. These parallel lines are drawn at a value equal to the Fibonacci number, starting from 0.618-fold size of the channel, then 1.000-fold, 1.618-fold, 2.618-fold, 4.236-fold, etc. When the fifth wave ends, corrections can be made in the direction opposite to the trend.