Trends/Trendlines and channels

Trendline fan

Several lines from the same starting point, each at a different steepness, used to watch which slope price follows.

Trendlines and channelsBest on 6M, 1Y, 3YAlso called fan lines, fan principle

Illustration of the trendline fan shape. It is a sketch, not real price data.

What it shows

A fan starts at one swing low (or high) and draws three lines to the right. The usual slopes are 38.2%, 50% and 61.8% of the way up to a later swing high. They are Fibonacci ratios taken from the vertical move.

Price often breaks the steepest line first, then settles on a flatter one. The fan lets you see which slope price is on and which have already been given up.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Pick a swing low and the next swing high.
Take 38.2%, 50% and 61.8% of the price move between them.
Draw a line from the swing low through each of those points at the swing high's time.
Extend each line to the right.

Starting values: Ratios 38.2%, 50%, 61.8%; Anchors most recent swing low and following swing high. These are proposed and will be tuned on real price data before launch.

How to read it

The gold dot is the starting point.
Each line is a possible path. A break of one often leads the eye to the next.
A close below all three lines means the whole rise has been unwound by the fan's measure.

Status labels you may see

Label	What it means
Above all lines	The last close is above the steepest line.
Between lines	Between two of the fan lines.
Below all lines	Under the flattest line.

What cancels it

A close below the flattest line, which leaves nothing for the fan to measure.

What traders check next

Which line price touched most recently.
How many bars price spent on each line.
Whether the lines line up with other levels.

Limits

The ratios are a convention, not a law.
The fan depends on one swing low and one swing high.
With a different anchor point the fan looks different.

Try it in forecastviz

Open any ticker and choose Trendlines and channels → Trendline fan in the left menu.
Switch between 6M, 1Y, 3Y to see how the picture changes.
Compare with Speed resistance lines and Gann fan on the same chart.

Open on a ticker

Questions

Is this the same as a Gann fan?

No. Gann fans use fixed time-to-price angles. A trendline fan here uses ratios of the price move.

Why those ratios?

They come from Fibonacci numbers, a common choice. They have no special status beyond convention.