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Fibonacci Extension

What is Fibonacci extension?Hey everyone! 👋 Last time we explained some of the basics to know when it comes to understanding the Fibonacci retracement tool. If you haven’t read that post, be sure to check it out here: In this post, we are going to look at the Fibonacci extension along with a few exhibits that may help you solidify your understanding of this unique trading tool. Please remember this is an educational post to help everyone better understand investing and trading tools. In no way are we trying to promote a particular style of trading! Table of Contents: 1. What are Fibonacci extension levels? 2. What is the significance of extension levels? 3. How to find extension levels? 4. Difference between the Fibonacci retracement and Fibonacci extension Without further ado, let’s jump in! What are Fibonacci extension levels? A Fibonacci extension is a tool that can be used to find price targets or estimate how far a price may move after the retracement/pullback is over. Extension levels are also possible areas of interest where the price may stall or reverse. It can be used to find projected areas of support or resistance when the price is moving into an area where other methods of finding support or resistance are not applicable or evident. Fibonacci extension levels can be calculated to give the trader ideas on profit targets. Significance of Fibonacci extension levels Different traders use this tool differently but the most common usage is as follows: Fibonacci extensions can be used for any timeframe and in any market- stocks, commodities, cryptocurrencies, etc. Fibonacci extension levels indicate a price area that will be significant for the stock after the pullback/correction is over. Extension levels can be drawn on different price waves over time. When levels from these different waves converge at one price, that could be a very important area. For example , A stock may be in an uptrend. After a move up, it retraces to the 61.8% level. Then, it starts to go up again. In this case, the extension tool can be used to find the optimal targets after the price moves above the swing high level (100% level). How to find Fibonacci extension levels? In order to find the Fibonacci extension levels, you have to find the recent significant swing high and swing low and then plot the Fibonacci extension accordingly. For uptrend: First, select the swing low and then the swing high. Then go to the Fibonacci settings and select reverse. For downtrend: First, select the swing high and then the swing low. Then go to the Fibonacci settings and select reverse. Exhibit: Fibonacci extension in an uptrend Exhibit: Fibonacci extension in a downtrend Difference Between Fibonacci Retracements and Fibonacci Extensions Fibonacci retracements provide levels for a pullback whereas Fibonacci extensions provide levels in the direction of the existing trend. For instance, a stock goes from 50 to 100 and then falls back to 75. The move from 100 to 75 is a retracement. If the price starts rallying again and goes to 150, that is an extension because the price moved past the previous swing high which is 100 in this case. Conclusion: Adding Fibonacci analysis with other common methods of technical analysis can be useful for adding confluence to a trade. Thanks for reading! Hope this was helpful! See you all next week. 🙂 – Team TradingView Feel free to check us out on Twitter and Instagram for more awesome content! 💘
NYSE:SNAPEducation
by TradingView
18
GreenLam. How to set Targets when stock are at all time high.Understanding the overall structure. :- Here it is simple higher high higher low structure. Stock currently above previous higher high. How to Set Targets using Fibonacci extensions. First Identify the swing. here it is 308 to 1389. then place Fibonacci tool. After placing look at 38.2% 50% 61.8% levels if the stock has faced major resistance or support or consolidated for some time then the swing identification is correct. Look for extension levels. You'll get your targets. Looking at the momentum review the potion at each extension levels .
NSE:GREENLAMEducation
by varadtambolkar
4
Fibonacci Masterclass - Fibonacci Retracement and ExtensionHi guys, I have finally completed the thread on Fibonacci (Though it took longer than usual). I have tried with the best of my little knowledge to create this thread. This has everything you need to know about Fibonacci retracement and Fibonacci extension. Also, if the thread is free that doesn't mean I have compromised with the quality. All you have to do is just read this thread again and again until you get a good grasp of it. everything. Table of Contents: 1. What Are Fibonacci Retracement Levels? 2. Significance of Fibonacci Retracement levels 3. Finding Fibonacci Retracement Levels 4. How to use the Fibonacci retracement levels? 5. What are Fibonacci Extensions? 6. Significance of Fibonacci Extension levels 7. Finding Fibonacci Extension levels 8. Difference Between Fibonacci Retracements and Fibonacci Extensions What are Fibonacci Retracement levels? • Fibonacci retracement levels are horizontal lines that indicate areas where the price could stall or reverse. • These horizontal levels can act as a potential support or resistance levels • They are based on Fibonacci numbers. Each level is associated with a percentage which means how much of a prior move the price has retraced. • The Fibonacci retracement levels are 23.6%, 38.2%, 61.8%, and 78.6%. • While 50% is not a pure Fibonacci ratio, but it is still used as a support and resistance indicator. This is because people worldwide regard it as an important level. • The price won’t always bounce from these levels. They should be looked at as areas of interest. Hence, please use the Fibonacci retracement as a confirmation tool. Significance of Fibonacci Retracement levels Fibonacci retracements can be used to: • Place entry orders • Determine stop-loss levels • Set price targets For example, A stock may be in an uptrend. After a move up, it retraces to the 61.8% level. Then, it starts to go up again. Since the bounce occurred at a Fibonacci level during an uptrend, you can enter long positions with a stop loss just below the Fibonacci level or at the candlestick low. Finding Fibonacci Retracement levels In order to find the Fibonacci retracement levels, you have to find the recent significant Swing High and Swing Low. • For uptrends, select the Swing Low and then the Swing High. • For downtrends, select the Swing High and then the Swing Low. Example: Fibonacci retracement in an uptrend Example: Fibonacci retracement in a downtrend How to use the Fibonacci retracement levels? If the price is approaching a Fibonacci level, you should look out for the following things at the point of interaction or in the vicinity of the level. • Some reversal candlestick pattern • Volume is above average. • Moving average • RSI divergence • Previous S/R level or pivot level The trade will be a high probability trade if some of these factors create a confluence zone. What are Fibonacci Extensions? • Fibonacci extension is a tool that can be used to find price targets or estimate how far a price may move after the retracement/pullback is over. • Extension levels are also possible areas of interest where the price may stall or reverse. • It can be used to find projected areas of support or resistance when the price is moving into an area where other methods of finding support or resistance are not applicable or evident. • If in a stock, a new high/low occurs, the trader can use the Fibonacci extension levels to get an idea of where the price can go. • Fibonacci extension levels can be calculated to give the trader ideas on profit target placement. Significance of Fibonacci Extension levels: • Fibonacci extensions can be used for any timeframe and in any market- stocks, commodities, cryptocurrencies, etc. • Fibonacci extension levels indicate a price area that will be significant for the stock after the pullback/correction is over. • Extension levels can be drawn on different price waves over time. When levels from these different waves converge at one price, that could be a very important area. Finding Fibonacci Extension levels In order to find the Fibonacci extension levels, you have to find the recent significant Swing High and Swing Low. • For uptrends, click on the Swing Low and then on the Swing High. Then go to the Fibonacci setting and click on reverse. Or if your software directly has the extension tool then it’s even easier. • For downtrends, click on the Swing High and then on the Swing Low. Then go to the Fibonacci setting and click on reverse. Example: Fibonacci extension in an uptrend Example: Fibonacci extension in a downtrend Difference Between Fibonacci Retracements and Fibonacci Extensions • Fibonacci retracements provide levels for a pullback whereas Fibonacci extensions provide levels to move in the direction of the existing trend. • For instance, a stock goes from 50 to 100, and then back to 75. The move from 100 to 75 is a retracement. If the price starts rallying again and goes to 150, that is an extension because the price moved past the previous swing high which is 100 in this case. This is everything you need to know about Fibonacci retracement and extension levels. This thread is more than enough to make you profitable. Keep reading and revising until you learn everything written in this post. I hope you find this post useful. Also, if anyone is interested in getting a consolidated PDF version of this thread, then you can message me, I'll provide it. Disclaimer: This is NOT investment advice. This post is meant for learning purposes only. Invest your capital at your own risk. Happy learning. Cheers! @johntradingwick
NSE:BANKNIFTYEducation
by johntradingwick
145
Using the Trend-Based Fib Extension ToolThe Fibonacci ratios are widely used among traders to help identify potential areas of reversal in the movement of price action. The Trend-based Fibonacci Extension tool utilizes three points on a previously identified trend in order to draw the Fib ratios on the chart. In the chart above, price was rejected twice forming a double top which is a fairly strong reversal pattern. To help identify potential areas of support and resistance we have drawn a Trend-Based Fib Extension. Using the double top patterns High, Low, and High as the three points for the Trend-Based Fib Extension, the Fibonacci ratios are drawn on the chart. In this example, you can see that price action respected these levels very well until finding strong support at a potential bottom that corresponds with the 200% extension level. But, notice the region in the yellow box on this chart. There seems to be no identified areas where the Fibonacci ratios show support or resistance. While retrospectively we can tell that the area of support found at ~ $12 (141.4%) in mid-November 2017 did not produce a new bull market. At the time there was a potential reversal at that region resulting in higher highs and therefore we could have pulled a NEW Trend-Based Fib Extension as shown below. As the new Trend-Based Fib Extension is identifying areas of a new uptrend, we see that these ares are shown in a way that they were not in the previously drawn Trend-Based Fib Extension. However, price was rejected at the 61.8% level and continued downward until the 0% extension level was broken, thus invalidating this Trend-Based Fib Extension. While the upward price trend did not continue, there was a local high that was made and thus could be utilized to create another Trend-Based Fib Extension to further identify areas of reversal for the continuing downtrend as shown below. Looking at this newly created Trend-Based Fib Extension, we see that the areas moving down to the 78.6% extension level are very well respected, at which time the price found support, creating a triple bottom reversal pattern. It is interesting to note that the 78.6% extension on this Trend-Based Fib Extension pull is at $1.82, and the 200% extension level from our first Trend-Based Fib Extension pull was at $1.95, a mere $0.13 difference in price. This area where the two levels of a Trend-Based Fib Extension or Retracement group together is know as a Fib cluster and indicates areas of strong support or resistance. With price forming a triple bottom and reversing from this level, is it possible that this is the bottom of this downtrend? Could a new Trend-Based Fib Extension now be pulled from a new Low/High/Low to identify potential areas of support and resistance? Give it a try and see what you find!
NYSE:AMCEducation
by TradingView
10
Potential Nifty Top With Fibonacci and Elliot Wave TheoryDISCLAIMER:There is no guarantee of profits nor exceptions from losses. Technical analysis provided on the chart is solely the personal views of my research. You are advised to rely on your own judgments while taking any investing/Trading decisions. Past performance is not an indicator of future returns. Investment/trading is subject to market risks. Seek help of your financial advisors before investing/trading. I may or may not trade this analysis. Details in description. -------(((((Please LIKE & Donate Coins to support my analysis)))))------- Plotted Elliot Waves on Nifty Monthly Chart so lets find out potential top 1. Nifty Top Based on Elliot Wave Theory where Wave 1 = Wave 5 a. Consider Wave 1 start from 279 which is lifetime low of Nifty then wave 5 should 13589.2 Where wave 1 height is 6078.1 + 7511.1(low of Wave 4) = 13589.2 b. Consider Wave 1 start from 0 then Nifty wave 5 top should be 13868.2 Where Wave 1 height is 6357.1 + 7511.1(low of Wave 4) = 13868.2 2. Nifty Top Based on Elliot Waves and Fibonacci extension where Wave 5 is equal to 0.618 of Wave 3 which is 13800.95. The next Fibonacci extension would be 0.786 which is 15510.8 which is less likely to happen.
NSE:NIFTYEducation
by Niftydirection
5
Nifty Elliot Wave analysis 11-11-2020 Still Some Upmove pendigDISCLAIMER:There is no guarantee of profits nor exceptions from losses. Technical analysis provided on the chart is solely the personal views of my research. You are advised to rely on your own judgments while taking any investing/Trading decisions. Past performance is not an indicator of future returns. Investment/trading is subject to market risks. Seek help of your financial advisors before investing/trading. I may or may not trade this analysis. Details in description. -------(((((Please LIKE & Donate Coins to support my analysis)))))-------
NSE:NIFTYEducation
by Niftydirection