Chart Patterns
Fibonacci Extension Profit-Target Zones
The market doesn't reward being right. It rewards managing being wrong, cheaply.Jason Parker, Founder of Trading Habits
Extensions project likely profit-target zones beyond a completed swing using genuine A-B-C prices, the exit side of the Fibonacci toolkit, distinct from a retracement, which times the entry on a pullback.
Drag point C, then play the next leg
A genuine swing generates from A up to B, then pulls back. Drag the slider to move point C along that genuine retracement and the 127.2%, 161.8%, 200%, and 261.8% extension lines recompute live from the genuine A, B, and C prices. Lock it in, play the forward leg, and see which level actually got tagged.
Drag point C, then lock it in to play the forward leg.
| Furthest level reached | Trials | % of trials |
|---|---|---|
| None (below 127.2%) | 0 | — |
| 127.2% | 0 | — |
| 161.8% | 0 | — |
| 200% | 0 | — |
| 261.8% | 0 | — |
How it works
- Each ratio uses a genuine formula off the A-to-B swing. The 161.8% level is C + 1.618 × (B − A). The 127.2%, 200%, and 261.8% levels use the same formula with their own multiplier, all measured from the genuine prices in this specific swing.
- C's position shifts where the whole ladder sits in price, not how far it has to travel. The offset added on top, the ratio times the A-to-B swing size, stays fixed no matter where C lands. A deeper retracement just projects that same ladder lower in price, a shallow one projects it higher.
- Every locked-in trial logs a genuine result. Once C is locked, a fresh forward leg plays out and the tool checks its genuine highs against the ladder. The furthest level actually touched, or none of them, adds one entry to the distribution table, which fills in as you drag, lock, and replay.
Where this breaks
Extensions assume the second leg resembles the first
Every level on the ladder is just a multiple of the size of the first leg, A to B. That only means something if the second leg has some rough self-similarity to the first, and plenty of genuine second legs don't. A move can stall well short of 127.2% and reverse, or it can blow straight through 261.8% and keep running far past the top of this tool's own ladder. The distribution table above tends to pile up at the two ends, "None" and "261.8%", not spread evenly across the middle rungs. Second legs here mostly either die early or run the whole ladder, they rarely stop exactly at 161.8% or 200% along the way, that lumpy spread is the honest picture of how often the projection actually holds.