## Fibonacci method in Forex## Forex trading with Fibonacci method 📈 Mini-lesson on how to use Fibonacci |

## How to calculate Fibonacci retracement and extension levelsThree most used Fibonacci retracement levels are 0.382 or 38.2%, 0.500 (50%) and 0.618 (61.8%). Three most used Fibonacci extension levels are 0.618, 1.000 and 1.618. Also 1.382 extension can be applied as well. Let's take a look at the next picture: In the example above we are in the uptrend. Lowest swing — point A — is 120.75; To calculate retracement levels and enter Long at some point C we do next: Calculations for Uptrend and Buy order: B — A = ? 0.382 (38.2%) retracement = 121.44 — 0.69 x 0.382 = 121.18 Fibonacci retracement levels formula for an uptrend: C = B — (B — A) x N% Now we need to calculate extension levels: 0.618 (61.8% ) extension = 121.44 + 0.69 x 0.618 = 121.87 Fibonacci extension levels formula for an uptrend: D = B + (B — A) x N%
Highest swing — point A — is 158.20; lowest swing — point B — is 156.44. Calculations for downtrend and Sell order: A — B = ? Because of the downtrend we need to 0.382 (38.2%) retracement = 156.44 + 1.76 x 0.382 = 157.53 Fibonacci retracement levels formula for downtrend: C = B + (A — B) x N% Now let's find Fibonacci extension levels (downtrend): 0.618 (61.8%) extension = 156.44 — 1.76 x 0.618 = 155.35 Fibonacci extension levels formula for downtrend: D = B — (A — B) x N% To help calculate Fibonacci levels we have also made a free tool for Forex traders — Free Fibonacci Calculator — available for downloading.
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