A fan chart is used to measure possible outcomes based on past data. It looks like a general line chart, but the line fans out on either side representing a range of predictions, with the central line itself being the most likely outcome. They are used often in fiscal matters, like forecasting future inflation.

Determining what your X and Y variables represent, plot the data on the graph. If you are using X as a variable of time, you'll want to plot old data, and then whatever you have most recently.

Determine the Highest Probability Density Interval by drawing a straight line on the vector where the most points rest. This line will be your most likely outcome. If the points are laid out symmetrically, the line will rest on the mean. If the points are non-symmetric, the central line of the fan should be where the mode is (as in the most repeated number in your column of Y-axis data).

The most total points that can be connected with a single line the more probable the outcome will be. Connect the points above and below your central line, which will serve as your upper and lower range.

Shade the points in the centre the darkest, getting fainter as you reach the upper and lower ranges. This graph should now be legible, with the darkest areas being the most probable outcome.

#### Tip

You can also use Microsoft excel to create a fan chart easily. Go to "Chart Types" and click on "Standard Types." Choose the graph selection called "XY(Scatter)"; just make sure to select the subtype of "Scatter" type of graph. You get a fan graph when you select the subtype as "Scatter. Compares pairs of Values." Voila!