2.9 - Fibonacci extensions

Purpose: To set price targets & support / resistance levels

While fib retracements are used to measure where price might retrace to, extensions are where price might extend to

Fib extension levels are expressed on ratios as percentages, being:

• 1             <- Important
• 1.272
• 1.618    <- Important
• 2
• 2.618   <- Important
• 3.618
• 4.236
• 4.618

Just because the price hits an extension level, doesn't mean you automaticlly sell, but it can be a stronger sell signal if you see weakness approaching or hitting the zone.

If it's a weak move (corrective wave), the C wave, usually only hits 1 or 1.618

In a parapolic trend, going to log is highly recommended

To draw a retracement, you go from swing low to swing high to the next swing low.

The 1.618 is usually the strongest magnet.