Direct answer
A worked example of Fibonacci Arcs is a step-by-step demonstration of how you pick two anchor points on a chart, compute distances between them, and then draw arcs using Fibonacci ratios. The point of a worked example is not to predict outcomes, but to make the arithmetic and geometry explicit so you can reproduce the same arcs and verify whether the visual alignment is meaningful to you.
Mechanism or definition
Fibonacci arcs are a graphical construction that uses Fibonacci ratios to convert the distance between two chart points into arc radii. The method typically works like this:
- Choose a start anchor (point A) and an end anchor (point B) on the price axis.
- Compute the vertical distance (or “price distance”) between A and B, denoted as D.
- Use selected Fibonacci ratios (for example, 0.236, 0.382, 0.500, 0.618, 0.786) to form radii: for each ratio r, the corresponding arc radius is r × D.
- Draw arcs centered at the start anchor A, using those radii, so the arcs “fan out” from A.
Different charting tools may implement “vertical distance” versus other variants (for example, using absolute price units consistently, but anchored to a specific plotting convention). Because tools vary, a fully verifiable example must state the convention used.
Evidence or example
Worked numerical example (all assumptions stated)
Assumptions (made explicit):
- We are working with a chart where price is measured on a vertical axis.
- We choose point A at price 100.
- We choose point B at price 110.
- We use vertical price distance for the construction.
Step 1: compute distance D
- D = |110 − 100| = 10.
Step 2: select Fibonacci ratios Use r ∈ {0.236, 0.382, 0.500, 0.618, 0.786}.
Step 3: compute radii r × D
- 0.236 × 10 = 2.36
- 0.382 × 10 = 3.82
- 0.500 × 10 = 5.00
- 0.618 × 10 = 6.18
- 0.786 × 10 = 7.86
Step 4: interpret the arcs as projected levels relative to A If an arc is drawn from A with radius 2.36 upward, the corresponding projected level is 100 + 2.36 = 102.36 (under the convention that arcs are plotted upward from A). Similarly:
- 100 + 3.82 = 103.82
- 100 + 5.00 = 105.00
- 100 + 6.18 = 106.18
- 100 + 7.86 = 107.86
How to verify independently:
- On a charting tool, place anchors at the same A=100 and B=110.
- Ensure the tool uses the same ratios and the same “arc centered at A” convention.
- Check whether the arc intersections align with the projected level set {102.36, 103.82, 105.00, 106.18, 107.86}.
If your tool uses a different convention (for example, centering from B, or measuring distance differently), you should expect different levels—even if the ratios are the same.
Limitations and risks
Material limitations
- Anchor selection is variable. If you choose different points for A and B, D changes and every arc radius changes. So the drawing is highly sensitive to the exact anchors.
- Ratios are fixed; market behavior is not. Fibonacci relationships describe mathematical proportions, not stable future outcomes.
- Tool conventions can differ. Some implementations may plot arcs in different orientations or use different coordinate assumptions, which changes where arcs land.
Failure modes (what can go wrong)
- Misinterpretation as a standalone signal: arcs may appear to line up visually, but alignment alone does not prove causality or predictive accuracy.
- Overfitting to history: repeating the method after noticing what happened can make it seem more consistent than it is.
- Changing chart conditions: liquidity, execution quality, and chart scaling/formatting can change how levels visually correspond.
Verification or next question
To independently validate Fibonacci arcs using your own data, repeat the worked arithmetic with clearly stated assumptions:
- record your chosen A and B values,
- state the distance definition (vertical price distance, as used here),
- list the ratios you include,
- compute the projected levels (r × D added to A under the upward convention),
- then confirm that your charting tool reproduces the same arcs.