Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

shooly76

Fibonacci Retracement Vs Extension? (grid?)

Recommended Posts

ok, so Im learning a little about fib grids and levels and that its basically supp and resistance..

 

its my understanding that a fib retracement is used for a potential long trade. So is a fib extension used in a potential short trade?

 

also in a fib retracement, the top of the fib grid is at a new high, so 0.0% level is lined up at the level of the new high. so if in a potential short trade (or fib extension) would the grid be flipped? IOW 0.0% lined up w the new low?

Share this post


Link to post
Share on other sites

ok..so Im thinking about this, and it seems that Im a little off base w my interpretation of retracement for long and extension for short.

 

so I guess its a retracement of the trend itself whether in a downtrend or uptrend. if it goes back to the mean, its a retracement either way.. is this correct?

 

so what is an extension?

 

and I still need info about the grid and levels...like I know that the 0.0% gets lined up w a new high, for potential long entries. but what about for short entries? does the 0.0% get lined up w the new low level?

Share this post


Link to post
Share on other sites

fib levels are one of those very personal things. One person can interpret it completely differently to another and they may both be looking at the same chart in the same time frame.

A lot will depend on your definitions of other such things as "uptrend". "downtrend" etc;

Also how do you determine from where to draw the start and end point from which to measure.....these are very personal and ideally should just be worked out for you in a sense for you.....and then apply it in a consistent fashion.

 

Often you might say that if something consolidates or starts to bounce from a 50% retracement level then it is likely that the recent move is just a retracement of the prevailing bigger trend, and so going with that trend is a potentially safer trade.

 

As a starter I tend to think about it as such....

If I determine an instrument is in an uptrend, and it looks like its having a pullback, and that pullback is near the 50% level, then if might offer a long opportunity. (note all the might and if words)

and

if I am long and the fib has extended, then the 100% fib extension from where i measured it might be a place I would expect some profit taking to occur.

 

http://www.traderslaboratory.com/forums/attachments/2/24865d1307596798-fx-eurotrash-eurchart.gif

 

OR

if if I thing something is in a downtrend and it has a corrective ABC move back up retracing the downtrend, then the C leg of the ABC move may be a 100% extension of the AB leg from B...this could offer a shorting opportunity. (sorry dont have picture at present, but will get one)

 

 

 

 

There are ample sites around showing how to draw these, and every charting program while similar may also differ - so read their help logs.

 

to keep it simple as a suggestion focus first on 50%, 61% retracements, and 100% and 161% extensions.....then see what works for you in regards other ratios. Otherwise you will find many many lines to trade from

Edited by SIUYA

Share this post


Link to post
Share on other sites

A Fib Retracement or Extension have nothing to do with short or long. A Retracement is anywhere between >0% to <100%. Most popular retracements are 32.8% and 61.8%. An extension is >100%. Popular ones are 127% and 161.8%.

Share this post


Link to post
Share on other sites
A Fib Retracement or Extension have nothing to do with short or long. A Retracement is anywhere between >0% to <100%. Most popular retracements are 32.8% and 61.8%. An extension is >100%. Popular ones are 127% and 161.8%.

 

So true! The 127.2 extension (also referred to as external retracement) is a fabulous profit target that is reached very often in my experience. Also check this out....

 

Cheers,

 

Dutchie

Edited by Dutchie

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • ELV Elevance Health stock, watch for an upside gap breakout at https://stockconsultant.com/?ELV
    • ORLY OReilly Automotive stock, nice top of range breakout, from Stocks to Watch at https://stockconsultant.com/?ORLY
    • Date: 28th March 2025.   Market Selloff Deepens as Tariff Concerns Weigh on Investors     Global stock markets extended their losing streak for a third day as concerns over looming US tariffs and an escalating trade war dampened investor sentiment. The flight to safety saw gold prices surge to a record high, underscoring growing risk aversion. Stock Selloff Intensifies The MSCI World Index recorded its longest losing streak in a month, while Asian equities saw their sharpest decline since late February. US and European stock futures also signalled potential weakness, while cryptocurrency markets retreated and bond yields edged lower. Investors are scaling back their exposure ahead of President Donald Trump’s expected announcement of ‘reciprocal tariffs’ on April 2. His latest move to impose a 25% levy on all foreign-made automobiles has sparked fresh concerns over inflation and economic growth, prompting traders to reassess their strategies. Investor Strategies Shift Market experts are adjusting their portfolios in anticipation of heightened volatility. ‘It’s impossible to predict Trump’s next move,’ said Xin-Yao Ng of Aberdeen Investments. ‘Our focus is on companies that are less vulnerable to tariff policies while taking advantage of market dips to find value opportunities.’ Yield Curve Signals Economic Concerns In the bond market, the spread between 30-year and 5-year US Treasury yields widened to its highest level since early 2022. Investors are bracing for potential Federal Reserve rate cuts if economic growth slows further. Long-term Treasury yields hit a one-month peak as inflation risks tied to tariffs spurred demand for higher-yielding assets. Boston Fed President Susan Collins noted that while tariffs may contribute to short-term price increases, their long-term effects remain uncertain. Gold Hits Record High as Safe-Haven Demand Rises Amid market turbulence, gold prices soared 0.7% on Friday, reaching an all-time high of $3,077.60 per ounce. Major banks have raised their price targets for the precious metal, with Goldman Sachs now forecasting gold to hit $3,300 per ounce by year-end. Looking Ahead As investors digest economic data showing US growth acceleration in Q4, attention will turn to Friday’s release of the personal consumption expenditures (PCE) price index—the Federal Reserve’s preferred inflation measure. This data will be critical in shaping expectations for future Fed policy moves. With markets on edge and trade tensions escalating, investors will closely monitor upcoming developments, particularly Trump’s tariff announcement next week, which could further dictate market direction.   Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Andria Pichidi HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Crypto hype is everywhere since it also making new riches as well, i however trade crypto little as compared to other forex trading pairs.
    • The ewallets can be instant withdrawals like skrill etc or they can also pay through crypto but not tested their crypto withdrawals so far.
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.