Fibonacci extensions

[highasakite]

thanks for replying so quickly
i have looked at various vids about this although not with NTs specific tool
what am i supposed to do with the 3rd anchor?
i always stick it on top of the 2nd but that just makes the extension tool the same as the retracements tool with negatives added
its a mental block i need explained idiot style

I think this is what you are looking for:

http://www.swing-trade-stocks.com/fibonacci-extensions.html

In the first example, AIR pulls back from $25.92 (1) to $23.11 (2). It then rallies above that swing point high at $25.92 (2). So this stock has recaptured more than 100% of the move from 1 to 2. It then tops out at $26.68 (3).

Could we have known that this stock might run into resistance at $26.68 (3)? Yes - If we calculated a Fibonacci extension ahead of time.
Take the difference in price between 1 and 2. In this case: $25.92 - $23.11 = $2.81
Now take that difference, $2.81 and multiply it by 1.272. $2.81 x 1.272 = $3.57
Now add $3.57 to $23.11 (2) and you get...
$26.68 - the exact high at 3. That is the Fibonacci extension.

In the second example...

$28.75 - $25.00 = $3.75 x 1.272 = $4.77 + $25.00 = $29.77. We are off by three cents here.

So, if you buy pullbacks and you are wanting to take partial profits on a stock, you can calculate this ahead of time.

Note: The two common Fibonacci ratios used for calculating extensions are 1.618 and 1.272. There are others but these seem to work the best.

Itīs different from Ninjas fib extensions, using only two points instead of three. The last retrace only, to predict S/R levels of the presumed continuation of the trend or future reversal of it. I think this is what Dynamic Traders are using, as well as Carolyn Boroden in her book Fibonacci Trading.

Sometimes the 1.272 and 1.618 extension levels seems close to Ninjas 38,2% and 50% extensions depending on where you put point A of A-B-C. The two point version share only point B and C.

If I add 123,6% and 161,8% to Ninjas simple 2-point fib retracements and measure the same last retracement BC itīs getting even closer to the 2-point extension version. But Iīm not sure if its the same thing.

Compared to koganam I would say: The Fibonacci retracement will make measures of BC, using AB as a reference, while the Fibonacci extension will make measures of CD, using BC as a reference. And the Ninjatrader version measure CD by using ABC as a reference.

[koganam]

I think this is what you are looking for:

http://www.swing-trade-stocks.com/fibonacci-extensions.html

Itīs different from Ninjas fib extensions, using only two points instead of three. The last retrace only, to predict S/R levels of the presumed continuation of the trend or future reversal of it. I think this is what Dynamic Traders are using, as well as Carolyn Boroden in her book Fibonacci Trading.

Sometimes the 1.272 and 1.618 extension levels seems close to Ninjas 38,2% and 50% extensions depending on where you put point A of A-B-C. The two point version share only point B and C.

If I add 123,6% and 161,8% to Ninjas simple 2-point fib retracements and measure the same last retracement BC itīs getting even closer to the 2-point extension version. But Iīm not sure if its the same thing.

Compared to koganam I would say: The Fibonacci retracement will make measures of BC, using AB as a reference, while the Fibonacci extension will make measures of CD, using BC as a reference. And the Ninjatrader version measure CD by using ABC as a reference.

Read the whole thread. Especially #7. It explains the point that you just made.