Fibonacci Extension Indicator Example

To Calculate Fibonacci Extension levels on indices charts we use the Fibonacci Extension Indicator

What are the Fibonacci Extension Levels?

• 61.8% Fibonacci Extension Level
• 100% Fibonacci Extension Level

We use Fibonacci expansion levels to estimate where the stock indices price movement will reach. There are 2 important fibonacci expansion levels; 61.8% and 100% Fibonacci Extension levels, these level are used for taking profit.

To draw Fibonacci expansion we use 3 chart points.

To draw Fibonacci extension levels we wait until the stock indices price retracement is complete and indices price starts to move in the original direction of the Indices trend. Where the retracement reaches is used as point 3.

The example explained and illustrated below shows the 3 Chart Points where the Fibonacci extension indicator is drawn, marked as chart point 1, 2 and 3. Chart point 1 is where the stock indices price indices trend started, Chart point 2 is where the stock indices price indices trend retraced and chart point 3 is where the stock indices price retracement reached as shown on the stock indices trading example explained and illustrated below.

Fibonacci Extension Indicator Explained

The two Fibonacci extension levels 61.8% and 100% Fibonacci Extension levels were then drawn above the Fibonacci Extension Indicator as shown on the stock indices trading example above.