How to calculate Fibonacci extensions
The formula works for both directions: if A is above B (a down move), the targets project below C.
Worked example
- Price rallies from A = 100 to B = 200, then pulls back to C = 150.
- 1.0 extension (measured move) = 150 + 100 × 1.0 = 250.
- 1.618 extension = 150 + 100 × 1.618 = 311.80.
How to interpret Fibonacci extensions
Extensions turn a completed swing into objective profit targets. The 1.0 level (an equal-sized second leg) is the classic measured move; 1.618 is the most widely watched extended target. Use them to set take-profits and check the resulting reward with the risk/reward calculator.