Fibonacci Extension Basics

While retracements measure pullbacks within a leg, extensions measure potential expansion beyond the prior high or low after the pullback completes. Common extension levels: 127.2%, 141.4%, 161.8%, 200%, 261.8%.

Manual traders use extensions primarily for profit targets, not entries. After entering on a 61.8% retracement long, 127.2% and 161.8% extensions above the swing high give logical partial and full target zones.

Drawing methods vary: some tools use three-point ABC (swing low, swing high, retracement low) to project extensions from C. Others extend from the retracement leg. Learn your platform's method and stay consistent.

161.8% extension is the most cited runner target in trend continuation plays. 127.2% is a conservative first target when structure obstacles sit nearby.

Extensions in strong trends can be exceeded — treat levels as areas to scale out, not reasons to reverse blindly.