In this article, We learn about "Fibonacci Time Zone ".Let's Go!
Fibonacci Time Zone is a series of vertical lines.
Traders use Fibonacci time zones to break down a specific time period into smaller time periods whose lengths are consecutive Fibonacci numbers.
The end of each smaller period can mean important changes in price.
Unlike other charting techniques, time zones focus on time rather than the price component of price movement.
With this technique, choose a unit time interval as a reference and draw vertical lines at Fibonacci intervals 1, 2, 3, 5, 8, 13, 21, 34, etc. where new support or resistance is The level can be expected
Interpretation of Fibonacci time zones involves looking for significant changes in price near vertical lines.
Fibonacci Time Zones are used for Fibonacci time projections, one of the four most commonly used Fibonacci studies in technical analysis.
Fibonacci time zones are generated by first taking a certain time interval on a market chart as a base time increment (from one hour to one day).
The most useful Fibonacci time zones are generated by selecting a fundamental interval described by the time between two market bottoms or tops.
The base range is then multiplied by the Golden Ratio of 1.618 to determine the length of time from the end of the base range to the first Fibonacci time zone.
Future Fibonacci time zones are generated by multiplying each consecutive interval between Fibonacci time zones by 1.618.
In theory, Fibonacci time zones are the points at which large market events can be expected, from a reversal of the current price trend to a large change in price in the direction of the trend.
Actually, Fibonacci time zones do have a lot of predictive power (about 70%), but sometimes, large price events can happen between Fibonacci time zones, although these time zones are usually still associated with some size.
Due to this occasional inaccuracy, Fibonacci Time Zones and Fibonacci Time Projections should only be used as a guide and only in conjunction with other technical analysis tools.
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