Retracements, Extensions & Symmetry

Fibonacci Retracement 

A method of technical analysis for determining support and resistance levels. They are named after their use of the Fibonacci sequence. Fibonacci retracement is based on the idea that markets will retrace a predictable portion of a move, after which they will continue to move in the original direction.

Fibonacci Extensions

A tool that traders can use to establish profit targets or estimate how far a price may travel after a retracement/pullback is finished. Extension levels are also possible areas where the price may reverse.

Fibonacci Symmetry

One thing you may have seen is how price seems to move in waves not much different than the ones that came before it. In some cases, swing in price has been the exact same length in terms of price which makes symmetry something to consider.

You can measure the distance of one swing and project that swing to another swing and look for the 100% level which shows symmetrical pullbacks in price.

Fibonacci Clusters

A Fibonacci cluster is where a collection of Fibonacci retracement or extension levels, based on various price swings, convene near one price area. The theory of a cluster is that if multiple Fibonacci extension or retracement levels are near one price, that price is likely to be important support or resistance area.

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