What Fibonacci levels are
Fibonacci retracements divide a price swing by ratios derived from the Fibonacci sequence — 23.6%, 38.2%, 61.8% and 78.6% — plus the 50% midpoint. Traders use them to mark areas where a pullback might pause before the trend resumes. Extensions (127.2%, 161.8%, 261.8%) project how far the next leg could travel. The levels do not predict anything on their own; they are a consistent way to map reaction zones that many market participants watch.
How to use the calculator
Enter the swing high and the swing low of the move you are measuring, and choose the direction of that swing:
- Uptrend: the move went from the low up to the high. Retracements are measured down from the high, and extensions project above the high.
- Downtrend: the move went from the high down to the low. Retracements are measured up from the low, and extensions project below the low.
Every level is shown as a price, with the 61.8% retracement highlighted.
The formulas
range = high − low
uptrend: retracement r = high − range × r
extension e = low + range × e
downtrend: retracement r = low + range × r
extension e = high − range × e
In an uptrend, 0% is the high, 100% is the low, and the 161.8% extension sits 61.8% of the range above the high.
Worked example
Gold rallies from a swing low of 3,900 to a swing high of 4,100, a range of 200. Measured as an uptrend:
| Level | Price |
|---|---|
| 23.6% | 4,052.80 |
| 38.2% | 4,023.60 |
| 50% | 4,000.00 |
| 61.8% | 3,976.40 |
| 78.6% | 3,942.80 |
| 161.8% extension | 4,223.60 |
A trader looking for a pullback entry might watch the 38.2–61.8% zone (4,023.60 to 3,976.40) for a reaction, place the stop below the 78.6% level or the swing low, and consider the 127.2% or 161.8% extension as possible targets.
Common mistakes
- Picking swings to fit the answer. Use clear, significant highs and lows that stand out on the timeframe you trade, and choose them before you look at the levels.
- Treating levels as exact prices. Price reacts around zones, not to the pip. Combine levels with market structure, volume or a candle signal.
- Measuring the wrong direction. In an uptrend, retracements sit below the high; if your levels sit above it, the direction setting is wrong.
- Ignoring confluence. A Fibonacci level that lines up with prior support, a pivot point or a round number carries more weight than one sitting in empty space.