Fibonacci Extensions

# Thread: Fibonacci Extensions

1. Join Date
Apr 2010
Posts
6

## Fibonacci Extensions

I'm going through the babypips.com school and I'm stuck on the fibonacci extensions. I'm using Interbank FX Trader 4 and I was told to use fibonacci expansion in place of extension but I don't know if this is correct. it doesn't seem to work the same as Raghee demonstration. Also her demonstration tells me to right click and drag but everytime I right click it takes the tool (fibonacci expansion) out of my hands. Someone please help. I don't want to give up because of something stupid like this
Last edited by rupert1358; 05-17-2010 at 11:01 PM.

2. Join Date
Apr 2010
Posts
6
maybe someone can recommend a different demo download that has extension included in it

3. Originally Posted by rupert1358
maybe someone can recommend a different demo download that has extension included in it
Hi rupert

MT4 has both extension & expansion but not knowing Raghee application of them, I can only explain them in general as I've used them.

The extensions are the fib levels beyond the AB 0 & 100% levels of the fib retracement tool.

Expansion tool is separate and you click on point A & B, then you have to double click on the fib line to be able move (click & drag) the little arm to point C from which it projects the AB fib levels.

Hope that helps

4. Join Date
Apr 2010
Posts
6
thanks for the reply. It helped on the expansion tool but if there is an extension tool in mt4 I can't find it. your explanation of the extension must be way over my head

5. Originally Posted by rupert1358
thanks for the reply. It helped on the expansion tool but if there is an extension tool in mt4 I can't find it. your explanation of the extension must be way over my head
There isn't a fib tool called extension...it's called retracement.

The fib retracements levels you are probably familiar with are the 38.2, 50, 61.8% etc. The extension levels are the 127.2, 161.8% etc levels.

One use of them is after you see a move retrace to say the 61.8% level, you can place your order there, and set the take profit to the extension level of 127.2 or more.

6. Superior Master Contributor and Member
Join Date
Jan 2010
Posts
556
yeah, most platforms have a expansion tool, but mt4 incorporates into the rtracement tool.

7. Originally Posted by qwertymyfx
yeah, most platforms have a expansion tool, but mt4 incorporates into the rtracement tool.
Correction...MT4 does have an expansion tool, and it incorporates retracements and extensions into 1 tool.

8. Newbie
Join Date
May 2010
Posts
25

## Fibonacci Ex/expensions

Hello guys,
i really was confused with those extension levels and expansion levels in Mt4.
It took me 2 days to understand how to draw them in Mt4.
But now i hope i understand it. Pleasy check if i am right.

So the extension levels are:
0, 0.382, 0.618, 1.000, 1.382, 1.618

0%, 38,2%, 61,8%, 100%, 138,2% and 161,8%
at 0% it begins at the lower retracement lvl and goes up in this steps 38,2% and so on.
Right?

I had to add this lines in my mt4 software manually and please have a look if i did it correctly.
I just choose the 50% Retracementlvl to show you all the lines.

SETUP:

CHART:
http://img694.imageshack.us/img694/8296/fib1.gif
http://img408.imageshack.us/img408/4918/fib2.gif

9. Originally Posted by daninvest
Hello guys,
i really was confused with those extension levels and expansion levels in Mt4.
It took me 2 days to understand how to draw them in Mt4.
But now i hope i understand it. Pleasy check if i am right.

So the extension levels are:
0, 0.382, 0.618, 1.000, 1.382, 1.618

0%, 38,2%, 61,8%, 100%, 138,2% and 161,8%
at 0% it begins at the lower retracement lvl and goes up in this steps 38,2% and so on.
Right?
Hi dan,
The way Babypips explains them makes it confusing too.
Have you got 2 fibs overlapping in your chart (2 colors)? Also, the expansion arm in your chart don't seem to be anchored to any swing point.

The expansion fibs are basically used with 3 swing points where you measure the length of Point A to Point B, and then expands that measurment from a Point C....all the fib levels could then be considered expansions of the AB swing, and "projected" from point C. That is very useful in determining if AB=CD.

The retracement/extension fib tool is basically used with 2 swing points and measures from Point A to Point B. Any fib level within the 0 to 100% is called a retracement of the AB swing, and any level outside that is called an extension of AB.

Basic geometry. Hope that helps
Last edited by Sweet Pip; 05-20-2010 at 11:09 AM.

10. Newbie
Join Date
May 2010
Posts
25
Originally Posted by Sweet Pip
Hi dan,
The way Babypips explains them makes it confusing too.
Have you got 2 fibs overlapping in your chart (2 colors)? Also, the expansion arm in your chart don't seem to be anchored to any swing point.

The expansion fibs are basically used with 3 swing points where you measure the length of Point A to Point B, and then expands that measurment from a Point C....all the fib levels could then be considered expansions of the AB swing, and "projected" from point C. That is very useful in determining if AB=CD.

The retracement/extension fib tool is basically used with 2 swing points and measures from Point A to Point B. Any fib level within the 0 to 100% is called a retracement of the AB swing, and any level outside that is called an extension of AB.

Basic geometry. Hope that helps
Yes that helps but is confusing me a little bit more and shows me that i did not understand it at all

Okay back to Topic. I will try to explain how i draw this in my mt4.
With the Retracement tool i worked as you can see it in your schoolvideo.
I took a swing low (a) and draw it to a swing high (b). Then i get the retracement levels. This are the yellow lines in my chart.

To get the expension or extension levels i did the same.
So i took the expansion tool, took point A and B, from swing low to swing high. Then i have to put the line at the right place for Point C. In my chart it is the red line which goes to the 50% retracement line.
Normaly i had chosed the 38,2% and the first candle for my C.
In this example i choosed the 50% line because i want you to check if i set up the extension lvls right cause i did this manualy.

Of course i can do the same just with the expension tool.
Than i would look like this:
http://img39.imageshack.us/img39/7690/justexp2.gif
http://img185.imageshack.us/img185/7871/justexp.gif

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