Fibonacci Retracements & Extensions

Question 1

What does the ratio of any 2 successive numbers in the Fibonacci sequence tend towards?

Answer 1

1.618034 (golden ratio)

Question 2

What does fn/ fn+2 tend towards?

Answer 2

0.382

Question 3

What does fn/fn+3 tend towards?

Answer 3

0.236

Question 4

Retracement

Answer 4

A pull back measured as a percentage of the previous impulse in an upward trend

Question 5

What are the major and minor retracement levels?

Answer 5

Major levels
•38.2%
•50%
•61.8%

Minor levels
•23.6%
•76.4%

Question 6

What must you do before buying in the buying zone?

Answer 6

Wait for confirmation from other indicators such as medium term continuation/ reversal price patterns or coincidence trend lines and/or previous significant support or resistance levels

Question 7

Fibonacci extensions

Answer 7

Can be used having broken out of the buying zone to determine potential price objectives

Question 8

What should you also bear in mind when doing Fibonacci extensions?

Answer 8

Any previously significant highs for potential further resistance