Fibonacci Extension
Fibonacci-derived levels projected beyond a swing's origin to identify potential profit targets after a breakout or trend continuation.
Formula
Extension levels: 127.2% (1.272×), 161.8% (1.618×), 200% (2×), 261.8% (2.618×) of the AB swing length, measured from C.
Fibonacci Extensions project beyond the 100% level of a prior swing to mark where the next impulse leg may stall or complete. Common extension levels are 127.2%, 161.8%, 200%, and 261.8%.
The tool is used for target placement rather than entries. Draw it by anchoring on the prior impulse leg (point A to B) and the retracement low (point C). The extensions from C project where the new leg (C to D) may reach.
Example
ETH moves from $2,800 (A) to $3,500 (B), then retraces to $3,150 (C). The 161.8% Fibonacci Extension from that structure places the target at approximately $4,283 — the AB swing is $700, and $3,150 + 1.618 × $700 = $4,282.60. A trader holding a long from the C retracement sets a partial take-profit near that level.
Related Terms
Confluence
The overlap of two or more independent technical signals at the same price level, strengthening the case for a trade.
IntermediateFibonacci Retracement
Horizontal levels derived from Fibonacci ratios (23.6%, 38.2%, 50%, 61.8%, 78.6%) that highlight potential pullback support or resistance zones.
IntermediateSwing High
A candle or bar whose high is higher than both the preceding and the following candle's highs — a local price peak.
BeginnerTrend Following
A strategy that enters in the direction of the established trend and rides it until structural evidence of a reversal appears.
Intermediate