How I use (Fib) Extension Bitcoin / U.S. dollarBITSTAMP:BTCUSDaskbiswanath2025A Fibonacci (Fib) Extension is a popular technical analysis tool used by traders to predict how far a price might move after a pullback or retracement is over. While Fibonacci retracements tell you how deep a correction might go, Fibonacci extensions look forward to show you where the next wave of the trend could peak. They are primarily used to set profit targets or identify upcoming resistance levels. How Fibonacci Extensions Work When an asset is in a trend, it doesn't move in a straight line. It moves in waves: Impulse Wave: The initial strong move in the direction of the trend (e.g., from a low to a high). Retracement Wave: A temporary pullback against the trend. Extension Wave: The resumption of the main trend, which often breaks past the previous high/low. To plot a traditional Trend-Based Fibonacci Extension, you need to pick three specific points on your chart: Point 1: The start of the move (Swing Low in an uptrend). Point 2: The peak of the move (Swing High). Point 3: The end of the retracement (Higher Low). Once these three points are selected, the tool automatically draws horizontal lines projecting future key levels above the previous high. Key Fibonacci Extension Levels The most common extension percentages used by traders include: 50% (0.5) to 61.8% (0.618): Often the first major target if the momentum is moderate. 100% (1.000) to111%(1.11): Represents a 1:1 move, meaning the new extension wave is exactly equal in price distance to the initial impulse wave. 150%(1.5) to161.8% (1.618): The "Golden" Extension. This is arguably the most critical level where major trends frequently stall out or reverse. 200% ,261.8% & 300%: Used in highly aggressive, explosive bull runs (common in crypto markets).