Fibnacci Extension Levels.

In this article we are going to throw ligh ot the Fibnacci Extension Levels. Three most used Fibonacci extension levels are 0.618, 1.000 and 1.618. Also 1.382 extension can be applied as well.

















In the above picture we are in the uptrend. Lowest swing — point A — is 120.75;
highest swing — point B — 121.44.

To calculate retracement levels and enter Long at some point C we do next:

Calculations for Uptrend and Buy order:

B — A = ?
121.44 — 120.75 = 0.69

0.382 (38.2%) retracement = 121.44 — 0.69 x 0.382 = 121.18
0.500 (50.0%) retracement = 121.44 — 0.69 x 0.500 = 121.09
0.618 (61.8%) retracement = 121.44 — 0.69 x 0.618 = 121.01

Fibonacci retracement levels formula for an uptrend:

C = B — (B — A) x N%

Now we need to calculate extension levels:

0.618 (61.8% ) extension = 121.44 + 0.69 x 0.618 = 121.87
1.000 (100.0%) extension = 121.44 + 0.69 x 1.000 = 122.13
1.382 (138.2%) extension = 121.44 + 0.69 x 1.382 = 122.39
1.618 (161.8%) extension = 121.44 + 0.69 x 1.618 = 122.56

Fibonacci extension levels formula for an uptrend:

D = B + (B — A) x N%


Our next example is downtrend:
















Highest swing — point A — is 158.20; lowest swing — point B — is 156.44.

Calculations for downtrend and Sell order:

A — B = ?
158.20 — 156.44 = 1.76

Because of the downtrend we need to add to the lowest point B to find retracement.

0.382 (38.2%) retracement = 156.44 + 1.76 x 0.382 = 157.53
0.500 (50.0%) retracement = 156.44 + 1.76 x 0.500 = 157.32
0.618 (61.8%) retracement = 156.44 + 1.76 x 0.618 = 157.11

Fibonacci retracement levels formula for downtrend:

C = B + (A — B) x N%

Now let's find Fibonacci extension levels (downtrend):

0.618 (61.8%) extension = 156.44 — 1.76 x 0.618 = 155.35
1.000 (100%) extension = 156.44 — 1.76 x 1.000 = 154.68
1.382 (138.2%) extension = 156.44 — 1.76 x 1.382 = 154.01
1.618 (161.8%) extension = 156.44 — 1.76 x 1.618 = 153.59

Fibonacci extension levels formula for downtrend:

D = B — (A — B) x N%