# Fibonacci and Forex: Extensions

The key Fibonacci extension levels are found by performing various mathematical operations on the numbers in the Fibonacci summation series, and on the results of those operations.

Here, I recommend you not to over complicate things.

Fibonacci Arcs Fibonacci Arcs are semi-circles that are constructed from the Fibonacci sequence combining the form of an arc into the process of defining support and resistance levels.

Monday, September 10, 5: Fibonacci price extensions are similar to Fibonacci price retracements. It is also support and resistance indicator that is used to determine possible support and resistance levels. Like Fibonacci fans , and Fibonacci Retracements , Fibonacci extensions are based on the mathematical relationships, expressed as ratios, between the numbers in the Fibonacci summation series. How is it calculated? The key Fibonacci extension levels are found by performing various mathematical operations on the numbers in the Fibonacci summation series, and on the results of those operations.

The first ratio of It is also the square of 1. It is also the sum of 1. Finally, drag your cursor back down and click on any of the retracement levels.

This will display each of the Price Extension Levels showing both the ratio and corresponding price levels. In the chart above, you can even see price rise above the previous Swing High. Price rallied all the way to the It fell back to the A couple of days later, price rallied yet again before finding resistance at the As you can see from the example, the In a downtrend, the general idea is to take profits on a short trade at a Fibonacci extension level since the market often finds support at these levels.

At this point we can use our extension levels to identify targets for long trades and possible reversal locations for short trades. In this case the price broke straight through the The 4-hour chart below was also preceded by an uptrend.

On this occasion the price found strong support at 1. The price then found resistance at After breaking above

## BREAKING DOWN 'Fibonacci Extensions'

Fibonacci extensions are used in Fibonacci retracement, which is a common method of technical analysis used to forecast potential areas of resistance and support in the market. Retracement is.

The Fibonacci extension tool, available on most trading platforms, can help establish profit targets on trend trades or alert a trader to where potential trend reversal areas could develop. Throughout nature there is a repeating pattern, based on a series of “Fibonacci numbers” which Leonardo Pisano Bogollo introduced to the West. Learn key Fibonacci extension levels. I personally combine Fibonacci extensions with pivot points when trading. The great thing about Fibonacci extensions is that the numbers are simpsons-online.tk other indicators that move with price - Fibonacci gives you trading support and resistance levels for the day.