Fibonacci Extensions

[rupert1358]

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

[rupert1358]

maybe someone can recommend a different demo download that has extension included in it

[Sweet Pip]

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

[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

[Sweet Pip]

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.

[qwertymyfx]

yeah, most platforms have a expansion tool, but mt4 incorporates into the rtracement tool.

[Sweet Pip]

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.

[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?

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

[Sweet Pip]

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

[daninvest]

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