Fibonacci Extension
a.k.a. Fib extension, Fibonacci expansion
Levels beyond a price swing, such as 127.2% or 161.8%, used to guess where a trend might run to next.
In plain English
Levels beyond a price swing, such as 127.2% or 161.8%, used to guess where a trend might run to next.
While retracements look for where a pullback might stop, Fibonacci extensions look for where the next leg might reach. Traders measure a swing, then project it forward at ratios like 127.2%, 161.8% and 261.8%.
They are mostly used to pick profit targets. They are guesses with a ruler, not destinations the market is obliged to visit.
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