Fibonacci guide
Fibonacci Extension: How It Differs From Retracement
Extensions mark zones beyond a reference swing. While retracements examine reactions inside an existing move, extensions offer a reference for observing areas outside it.
Retracement versus extension
Retracements describe internal proportions of a move; extensions describe proportions beyond its range. The distinction helps organize the next areas to observe on a chart—it does not establish a price target.
127.2% and 161.8%
This chart shows 127.2% and 161.8% extension zones. Price can pause before them or continue through them, so a level should never be treated as a forecast or guarantee.
Use with care
An extension is more useful context after the reference swing is reasonably established. Data delays, a developing new swing, and market volatility can all change the displayed context.