Fibonacci Extension Indicator Example

To Calculate Fibo Extension levels on indices charts we use the Fib Extension Indicator

What are the Fibo Extension Levels?

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

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

To draw Fibo expansion we use Three chart points.

To draw Fibonacci extension levels we wait until the stock indices price retracement is complete and indices price starts to move in 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 trend started, Chart point 2 is where the stock indices price trend retraced and chart point 3 is where the stock indices price retracement reached as shown on the stock indices example illustrated below.

Fibonacci Extension Indicator Explained

The two Fibo 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.