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A check of numerous websites indicates without
exception that the technical analysis world utilizes circular Fibonacci arcs
that intersect a trendline between A and B at Fibonacci retracement
levels. The claim is that such arcs provide future support and resistance
based on a previous market swing. If non-circular arcs are used, thenin
general these support and resistance levels for price and/or time will not be
identified. Non-circular Fibonacci "arcs" might also provide
appropriate, albeit different, support and resistance, but it is important for
the user to note that they have not been evaluated for this purpose and should
be used with caution. Many analysts use a combination of Fibonacci
arcs in conjunction with Gann and Fibonacci fans, and other line studies,
depending on the intersection of these constructions to identify price and time
targets, which would be altered by non-circular arcs. Also, since the
standard Fibonacci arc is circular it is important to maintain that geometry
during zoom, which requires that the display be locked to the computer screen
and not the X, Y axis, while maintaining the proper intersections along
AB. As the trader considers different time frames, zooming might
change the price/time targets and require use of different retracement levels,
but the methodology remains unchanged, as it should.
Bill<FONT
size=2>
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