Qazi Forex Tips
In this lecture
- What the trend-based Fibonacci extension is for
- How to draw it with three points
- Using it to set take-profit levels
- Combining it with other confluence
Lesson notes
Three points, not two
The trend-based extension needs three clicks: the start of the move (A), the end of the move (B) and the end of the pullback (C). The tool then projects where the next move may reach, measured from C.
Levels traders watch
- 100%: the next move equals the first move (AB = CD).
- 127.2% and 161.8%: common targets in strong trends.
- Further levels are possible but are reached less often.
Use with confluence
A target is stronger when an extension level lines up with a higher-timeframe support or resistance, a round number or a previous swing. Take part of the trade at the first level and manage the rest.
Khulasa (Roman Urdu / Hindi)
- Retracement entry ke liye, extension profit target ke liye.
- 3 points: move ka shuru (A), akhir (B), pullback ka akhir (C).
- Ahem targets: 100%, 127.2%, 161.8%.
- Target ko support/resistance ke saath milayein.
Questions
What is the difference between Fibonacci retracement and extension?
Retracement measures how far a pullback may go inside a move; extension projects how far the next move may go beyond it.
How do I draw a trend-based Fibonacci extension?
Click the start of the move, the end of the move and the end of the pullback. The levels are projected from the pullback point.
Which Fibonacci extension level is best for take profit?
100% and 161.8% are the most watched. Choose the one that lines up with a support or resistance level.
Can I use Fibonacci extensions on Gold?
Yes. The tool works on any market with clear swings, including Gold and indices.
What is 1.618 in Fibonacci?
The golden ratio. As an extension level it marks a move 1.618 times the first leg.
Should I close the whole trade at the extension level?
Many traders close part at the first level and trail the rest. Decide the rule in advance.
Related lessons
Fibonacci retracement explained simplyRisk & Money Management
Where to set stop loss and take profit, and when to close halfMarket Analysis
How to use Fibonacci retracement: a step-by-step guideEducation only, not financial advice. Trading forex, Gold and CFDs carries a high risk of loss. Examples are for learning; test any method on a demo or in a simulator before using real money.