Retracement vs. Fib Extensions

Hubert Senters here. In the last video we’ve talked about Fibonacci retracements both long and short. And now, we’re going to switch over to extensions. So here’s the difference in the two. In the one on the top. I know there’s a bunch of pretty white lines. But anyway I started from here from point A and drew to point B. And then that’s going to give me the price action. It’s going to go like this and come back here. I’m potentially going to place a buy here and hopefully it goes higher. It’s usually a pullback an extension. In this case let me just double check what TradeStation is calling it. TradeStation is calling it a Fibonacci Retracement Line. That’s the one on top. And the one on the bottom is a Fibonacci Price Extention Line so retracement and extension. The main difference here is this is going to give you a target upside if you drawl from point one to point two and point three. And here’s the basics to sell that. Point one is a low. And then you have a high. And then you have a higher low. Point three has to be higher then point one and it’s usually in most cases lower than point two so it’s going to look like this. One, two, three. Now you know the basics of how it’s done. Here’s what it looks like. Point one. Point two. And then point three. One, two, three. And then it will extend a potential future price move higher if you do it correctly. In the next video I’m going to show you an example. Good luck. Hope it helps. See you on the next video. Hubert.


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