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Fibonacci tools

Fibonacci expansion

Projects where a new move might end, using the size of the previous move: 61.8%, 100%, 161.8% and 261.8%.

2 min read · Try it on a live chart ↗

The idea in plain words

Markets often move in steps of similar size. If the first leg was 400 pips and the pullback ended, the next leg is often 61.8%, 100% or 161.8% of the first.

How it is calculated

Click the start of the first leg (A), its end (B) and the end of the pullback (C). Levels are projected from C.

Target = C + (B − A) × ratio, ratios 61.8%, 100%, 161.8%, 261.8%

How to use it

  • Set profit targets at the 100% or 161.8% level.
  • Combine with resistance levels for confidence.

Drawing conclusions

  • Reaching 161.8% quickly is a sign of a strong trend.

Example

Gold rises from 2,300 (A) to 2,400 (B) and pulls back to 2,350 (C). The 100% target is 2,450 and the 161.8% target 2,512.

Prices in examples are illustrative.

Watch out for

  • Targets are possibilities, not promises.

A little history

Widely used in Elliott wave analysis, where wave 3 is often 161.8% of wave 1.

Educational content only. No indicator or pattern predicts the future, and nothing here is investment advice.