Fibonacci Extensions


Fibonacci Extensions
Fibonacci Extensions is a drawing tool with a calculation function. You as the user define the start on a significant swing low, then drag your mouse and click on the most recent swing high. Finally, drag your mouse down and click on any of the retracement levels.

Between these three price levels, the extension lines are projected according to the numerical proportion of the Fibonacci numerical series. The calculation is based on the golden section. The theory behind using Fibonacci Extensions for chart analysis is that price movements have rhythms similar to natural processes.

Most traders use Fibonacci Extensions in combination with other technical indicators/patterns to help them determine appropriate target prices.

You can find the tool in the Chart Tools group in the toolbar.

Entering Fibonacci Extensions

  1. Open a symbol chart.
  2. Click on the Fibonacci Extensions tool in the toolbar.
  3. Click into the chart to set the low swing point.
  4. Keep the mouse button pressed and move the pointer to a swing high. Release the mouse button.
The third point will be automatically calculated, but may be repositioned later by clicking and dragging it. For extrapolating values beyond the 100% level, you can set the corresponding lines to visible (e.g. for 138.2% and 161.8%). To do so, select the check boxes in the property inspector in the toolbar.

Direction-Dependent Analysis

For the sensible usage of the Fibonacci Extensions, it is important to enter the lines correctly into the chart. The start and end points have to be placed appropriately depending on whether you wish to analyze correction movements or trend movements.

Editing Fibonacci Extensions

  • To change the marks, click the anchor point of the respective line (the mouse pointer changes into an x-y axis symbol) and move it. The line positions will be adapted accordingly.
  • To move Fibonacci Extensions, drag them with the mouse (the mouse pointer turns into a hand symbol) and move it freely. Release the mouse button when done.
  • You can edit the ratio of each Fibonacci line in the extension. To do so, click on the numbers next to the check boxes (in the properties) and enter new values.
  • You can duplicate the Fibonacci Extensions by double-clicking on them.
  • When the Fibonacci Extensions is selected, you can edit the properties in the toolbox.
  • The alert function is available for Fibonacci Extensions. To set an alert, set the Alert Mode from Disabled to one of the options (see below).
  • To delete the Fibonacci Extensions, right-click on them and select Delete from the context menu. Alternatively, select the Fibonacci Extensions and press the DEL key.
  • You can extend the Fibonacci lines by either clicking and dragging an end on either side, or enabling the Extend Left or Extend Right properties in the Inspector.

Properties

Fibonacci Extensions Properties

% 1, % 2... - Select from the list of available Fib. levels the ones you want to display. You can edit the values by clicking on the numbers to the right of the check boxes and entering new ones.

Extend Left/Extend Right - Select whether the lines are to be extended to the left and/or right until the edge of the chart.

Mode - Select whether the lines are to be displayed in linear or logarithmic scale.

Graphic Properties

The following properties can be set for the Fibonacci Extensions tool:

Color - Here you can select a line color.

Width - Here you can set a width for all lines by entering a number.

Style - Here you can select a line style, e.g. solid or dotted.

Labels - Here you can set the value label for the lines to visible or hidden. In Tradesignal you can also specify the location at which the label should be displayed.

Show Guide Line - Here you can select whether the guide line is visible or hidden.

Alert Properties

The Extensions tool can be used with various kinds of alerts.

Alert Direction - Here you can select from the list whether crossings of all types lead to alerts or only crossings in a certain direction.

Alert Mode - Here you can select an alert mode from the list. Select whether crossing raises an alert always, once per bar or once overall.

Alert Name - Here you can specify a name for alerts generated by this tool. It will be included in the signal field of the alert.

Alert Trigger - Here you can select when an alert should be triggered.
  • Crossed: Triggers when the price crosses the tool, e.g. goes from below the tool to above the tool
  • Hit or Crossed: Same as above, but also triggers when the price merely hits the tool. This setting is useful for a Point&Figure Chart.
For further information on alert modes, see Alerts.