A Fibonacci spiral is one of the many Fibonacci studies for analyzing support and resistance levels on the price chart. It is also a technical analysis tool that provides the optimal connection between price and time analysis. The best combination of price and time will be reflected on each point on a spiral. Through price and time, there will be corrections and trend changes at all important points touched on the Fibonacci spiral growth path.
When drawing the Fibonacci spiral, we use the pole on the market chart as the center of the spiral, and then draw the spiral based on the golden ratio of the golden center. Some points on the spirals are important indicators to identify price spikes, levels of resistance or support or reversal pattern.
Traders can use Fibonacci spiral to predict market behaviors based key moments and key price levels.