📈 Indicators·intermediate

Fibonacci Extension

Also called: fib extension, fib targets

Fibonacci levels projected BEYOND the original swing (127.2%, 161.8%, 261.8%) — used to set price targets after breakouts.

Fibonacci extensions project Fibonacci ratios beyond the end of a prior price swing. They're used to find profit targets. The most common extension levels are 127.2%, 161.8% (the "golden ratio extension"), 200%, and 261.8%. These levels often mark where extended trends pause or reverse. The drawing technique uses three points: swing low, swing high, and then the pullback low (in an uptrend). The tool then projects the extension above the swing high. The 161.8% extension is the most-watched target — many institutional algos use it as a take-profit anchor. Extensions are most useful in trending markets with clear impulse-pullback-impulse structure. They give you measurable targets instead of guessing where to take profit.

Real trade example

USD/JPY's run from 140 to 161 in 2024 hit the 161.8% extension of the prior swing almost exactly at 161.95 — which is also where the BoJ intervened. Textbook extension target.

Related terms

Fibonacci Retracement

intermediate

Horizontal levels drawn at key Fibonacci ratios (38.2%, 50%, 61.8%) of a prior move — used to find pullback targets.

Take Profit

beginner

An order that automatically closes your winning trade at a predetermined profit level — your exit plan in advance.

Breakout

intermediate

When price moves decisively through a significant support or resistance level, often triggering a new trend.

Supertrend

intermediate

A trend-following indicator based on ATR that plots a single line above or below price — line below means uptrend, above means downtrend.

Golden Cross

beginner

When a short-term moving average (typically 50-day) crosses above a long-term moving average (typically 200-day) — a major bullish signal.

Death Cross

beginner

When a short-term moving average (typically 50-day) crosses BELOW a long-term moving average (typically 200-day) — a major bearish signal.

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