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The Fibonacci Extension tool is used to measure the amount the market has extended compared to the overall market movement. This tool uses ratios which are mathematical in nature, derived from the Fibonacci sequence developed by Leonardo Fibonacci around 1180 ACE. Fibonacci Extensions give you general target price areas.
Recommended Usage:
Fibonacci Extensions are commonly drawn from the beginning of Wave 1 (the Zero point) to the top of Wave 3 and then to the Wave 4 retracement to find a target price area for the Wave 5 extension. You would first turn on the Fibonacci Extension tool. When the Fibonacci Extension tool is turned on, you will notice that your mouse cursor changes to an arrow with Fib Ext attached to it. Move your mouse cursor to the beginning of the Wave 1 (the Zero point) and press your left mouse button once. Next, move your mouse cursor to the top of Wave 3 and press your left mouse button again. Lastly, you would move your mouse to the end of Wave 4 and, keeping the mouse cursor level with the end of Wave 4, slide your cursor horizontally to the right. You should see the Extension levels being drawn. Press your left mouse button a second time to anchor them in place.
An alternate method of drawing Fibonacci Extensions is from the end of Wave 1 (the beginning of Wave 2) to the top of Wave 3 and then to the Wave 4 retracement to find a target price area for the Wave 5 extension. To use this method you would first turn on the Fibonacci Extension tool. When the Fibonacci Extension tool is turned on, you will notice that your mouse cursor changes to an arrow with Fib Ext attached to it. Move your mouse cursor to the end of the Wave 1 (the beginning of Wave 2) and press your left mouse button once. Next, move your mouse cursor to the top of Wave 3 and press your left mouse button again. Lastly, you would move your mouse to the end of Wave 4 and, keeping the mouse cursor level with the end of Wave 4, slide your cursor horizontally to the right. You should see the Extension levels being drawn. Press your left mouse button a second time to anchor them in place.
Menu Functions:
The On/Off toggle buttons indicate if the associated extension value will be displayed. Press your left mouse button on the toggle button to either turn it On or turn it Off.
The Value: number box indicates the extension value. To change this, highlight the value in the number box and type in the value that you desire. For example, if you are looking for a 65% extension level, highlight one of the values and type .65.
The Color selection list allows you to change the color of each extension line.
Recommended Usage:
Fibonacci Extensions are commonly drawn from the beginning of Wave 1 (the Zero point) to the top of Wave 3 and then to the Wave 4 retracement to find a target price area for the Wave 5 extension. You would first turn on the Fibonacci Extension tool. When the Fibonacci Extension tool is turned on, you will notice that your mouse cursor changes to an arrow with Fib Ext attached to it. Move your mouse cursor to the beginning of the Wave 1 (the Zero point) and press your left mouse button once. Next, move your mouse cursor to the top of Wave 3 and press your left mouse button again. Lastly, you would move your mouse to the end of Wave 4 and, keeping the mouse cursor level with the end of Wave 4, slide your cursor horizontally to the right. You should see the Extension levels being drawn. Press your left mouse button a second time to anchor them in place.
An alternate method of drawing Fibonacci Extensions is from the end of Wave 1 (the beginning of Wave 2) to the top of Wave 3 and then to the Wave 4 retracement to find a target price area for the Wave 5 extension. To use this method you would first turn on the Fibonacci Extension tool. When the Fibonacci Extension tool is turned on, you will notice that your mouse cursor changes to an arrow with Fib Ext attached to it. Move your mouse cursor to the end of the Wave 1 (the beginning of Wave 2) and press your left mouse button once. Next, move your mouse cursor to the top of Wave 3 and press your left mouse button again. Lastly, you would move your mouse to the end of Wave 4 and, keeping the mouse cursor level with the end of Wave 4, slide your cursor horizontally to the right. You should see the Extension levels being drawn. Press your left mouse button a second time to anchor them in place.
Menu Functions:
The On/Off toggle buttons indicate if the associated extension value will be displayed. Press your left mouse button on the toggle button to either turn it On or turn it Off.
The Value: number box indicates the extension value. To change this, highlight the value in the number box and type in the value that you desire. For example, if you are looking for a 65% extension level, highlight one of the values and type .65.
The Color selection list allows you to change the color of each extension line.
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