[{"data":1,"prerenderedAt":347},["ShallowReactive",2],{"api/learn-center-post-en-how-to-use-fibonacci-retracements-and-extensions":3,"footer-en":57,"learn/crypto-trading/how-to-use-fibonacci-retracements-and-extensions-en-seo":255,"navigation-en-learn-center":260,"api/learn-categories-en":308},{"seo":4,"locale":28,"breadcrumbs":29,"excerpt":37,"featuredImage":38,"components":39,"title":5,"formattedPublishedAt":50,"geofencings":51,"category":52,"pagination":54,"campaignExternalId":8},{"title":5,"metaTitle":6,"metaDescription":7,"keywords":8,"metaRobots":8,"structuredData":9,"metaImage":10,"metaSocial":18,"canonicalURL":8,"localizations":19},"How to use Fibonacci retracements and extensions?","How to use Fibonacci retracements and extensions? - Crypto Trading","The Fibonacci sequence is a string of numbers. Learn using Fibonacci retracements and extensions in your crypto trading strategy now - Bitstamp Learn Center",null,{},{"url":11,"mime":12,"ext":13,"width":14,"height":15,"name":16,"alt":17},"bitstampImageUrl/1920x1080px_illustrations_learningcenter_58svg_b1c16f1c3a_5ea535b532.svg","image/svg+xml",".svg",192,108,"1920x1080px_illustrations_learningcenter_58svg_b1c16f1c3a.svg","",[],[20,23,26],{"pathname":21,"locale":22},"/en-gb/learn/crypto-trading/how-to-use-fibonacci-retracements-and-extensions/","en-GB",{"pathname":24,"locale":25},"/es/learn/crypto-trading/how-to-use-fibonacci-retracements-and-extensions/","es",{"pathname":27,"locale":28},"/learn/crypto-trading/how-to-use-fibonacci-retracements-and-extensions/","en",[30,34],{"id":31,"text":32,"url":31,"asUrl":33},"/learn/crypto-trading/","Crypto trading",true,{"id":35,"text":5,"url":27,"asUrl":36},"how-to-use-fibonacci-retracements-and-extensions",false,"\u003Cp>There are lots of tools used in technical analysis to help predict the future of market trends. Among them are Fibonacci retracements and extensions, which are tools based on a string of numbers called the Fibonacci sequence.\u003C/p>\n",{"url":11,"mime":12,"ext":13,"width":14,"height":15,"name":16,"alt":17},[40],{"component":41,"props":42,"content":43,"secondaryContent":47,"ctas":48,"secondaryCtas":49,"ctasNoMarginTop":36},"section.full-text",{"centered":36,"withoutSectionContainer":36},{"text":44,"width":45,"align":46},"\u003Cp>Fundamental to understanding the golden ratio and other methods to describe the natural world, the Fibonacci sequence was popularized in the West by Leonardo Pisano Fibonacci, an Italian mathematician from Pisa who lived at the turn of the 13th century.\u003C/p>\n\u003Cp>You probably remember this from your school days. The Fibonacci sequence starts as follows: 1, 1, 2, 3, 5, 8, 13 and so on, where each number is the sum of the two preceding numbers. Imagine a zero at the beginning to get started, e.g. 0+1=1, 1+1=2, 1+2=3, 2+3=5, and so on.\u003C/p>\n\u003Cp>The sequence has numerous applications in many fields of science. In technical analysis, however, it is most commonly encountered in the \u003Cstrong>Fibonacci retracement\u003C/strong> and \u003Cstrong>Fibonacci extension\u003C/strong> tools.\u003C/p>\n\u003Cp>FIBONACCI LEVELS ESSENTIALS\u003C/p>\n\u003Cul>\n\u003Cli>Fibonacci levels are based on the so-called \u003Cstrong>Fibonacci sequence\u003C/strong>.\u003C/li>\n\u003Cli>Fibonacci levels can be utilized to identify \u003Cstrong>support\u003C/strong> and \u003Cstrong>resistance\u003C/strong> zones on a trading &nbsp;chart.\u003C/li>\n\u003Cli>The Fibonacci retracement tool draws retracement levels between the swing high and swing low.\u003C/li>\n\u003Cli>These levels include 0.236, 0.382, 0.618 and 0.786.\u003C/li>\n\u003Cli>While not a Fibonacci ratio, 0.5 is also an important retracement level, while 0 and 1 serve as anchors of the Fibonacci retracement tool.\u003C/li>\n\u003Cli>The Fibonacci extension tool draws extension levels past the swing high or swing low.\u003C/li>\n\u003Cli>These levels most frequently include 1.236, 1.382, 1.5, 1.618 and 2.618.\u003C/li>\n\u003C/ul>\n\u003Ch2>Swing high and swing low\u003C/h2>\n\u003Cp>To use the Fibonacci levels properly, we must first learn how to identify the co-called \u003Cstrong>swing highs\u003C/strong> and \u003Cstrong>swing lows\u003C/strong>.\u003C/p>\n\u003Cul>\n\u003Cli>A \u003Cstrong>swing high\u003C/strong> is a high with two lower highs on the sides.\u003C/li>\n\u003Cli>A \u003Cstrong>swing low\u003C/strong> is a low with higher lows on the side.\u003C/li>\n\u003C/ul>\n\u003Cp>\u003Cstrong>When applying Fibonacci levels to a chart, these two points are where we need to place the tool’s anchors (1 and 0).\u003C/strong>\u003C/p>\n\u003Cp>There are many swing highs and lows on the charts. When we decide which ones to choose for applying the Fibonacci levels, it is wise to pick the most obvious options - those that really stand out.\u003C/p>\n\u003Cp>When it comes to choosing time frames, longer durations give us more reliable Fibonacci levels. However, this tool is often used for short-term trading, which means that shorter time frames are often preferred.\u003C/p>\n\u003Ch2>Fibonacci retracement\u003C/h2>\n\u003Cp>Among the most popular Fibonacci levels are \u003Cstrong>Fibonacci retracement\u003C/strong> levels, which help identify potential support and resistance zones. These levels are often used to identify entry (buy) and exit (sell) points, or to decide where to put a trigger for stop orders. These are automatically executed when a certain price is reached, preventing significant losses in the process.\u003C/p>\n\u003Cp>Each level of Fibonacci retracement is associated with a \u003Cstrong>set percentage\u003C/strong>, which is derived from the Fibonacci sequence. The percentage tells how much of a prior move the price has retraced.\u003C/p>\n\u003Cp>These percentages are \u003Cstrong>23.6%\u003C/strong>, \u003Cstrong>38.2%\u003C/strong>, \u003Cstrong>61.8%\u003C/strong> and \u003Cstrong>78.6%\u003C/strong>. Converted into decimal values, the Fibonacci retracement levels are 0, \u003Cstrong>0.236\u003C/strong>, \u003Cstrong>0.382\u003C/strong>, \u003Cstrong>0.5\u003C/strong>, \u003Cstrong>0.618\u003C/strong>, \u003Cstrong>0.786\u003C/strong> and 1.\u003C/p>\n\u003Cp>0 and 1 are the \u003Cstrong>anchors\u003C/strong> for Fibonacci retracement levels and represent the \u003Cstrong>swing high\u003C/strong> and \u003Cstrong>swing low.\u003C/strong> While not an actual number in a Fibonacci sequence, 0.5 is also considered an important retracement level.\u003C/p>\n\u003Ch3>Identifying support levels\u003C/h3>\n\u003Cp>When using Fibonacci retracement levels to identify \u003Cstrong>support\u003C/strong>, we are attempting to predict where the price may \u003Cstrong>retrace to after moving up\u003C/strong>. In other words, we’re identifying where the price might land after it has reached a peak and started declining. This could provide us with promising buy points.\u003C/p>\n\u003Cp>To set up the anchors of Fibonacci’s retracement correctly when looking for support levels, we must put the \u003Cstrong>first anchor\u003C/strong> of Fibonacci retracement \u003Cstrong>at the swing low\u003C/strong> (number 1) and the \u003Cstrong>second anchor at the swing high\u003C/strong> (number 0).\u003C/p>\n\u003Cp>The retracement levels are spread between the 1 and the 0 (the levels are 0.236, 0.382, 0.5, 0.618 and 0.786). Each of these levels represents potential support on the chart.\u003C/p>\n\u003Ch3>Identifying resistance levels\u003C/h3>\n\u003Cp>Fibonacci retracement levels can also be used to identify \u003Cstrong>resistance\u003C/strong> levels. In this case we’re trying to predict where the price may \u003Cstrong>retrace to after a move down.\u003C/strong> These could provide us with good sell points.\u003C/p>\n\u003Cp>In this case, we put the anchors in the \u003Cstrong>opposite order\u003C/strong>: \u003Cstrong>first we choose the swing high and then the swing low\u003C/strong>. Number 1 should be located at the top of our chart and number 0 at the bottom. Resistance levels are spread between them at 0.236, 0.382, 0.5, 0.618 and 0.786.\u003C/p>\n\u003Ch3>Utilizing Fibonacci retracement\u003C/h3>\n\u003Cp>Fibonacci retracement levels can be used to identify your entry points (support level), to set your exit points (resistance levels), or to decide where to put your \u003Cstrong>stop-loss order\u003C/strong>. The usual method for limiting losses with a stop order is placing the stop order slightly below a Fibonacci level.\u003C/p>\n\u003Cp>For example, if you used Fibonacci retracement to find support levels and your entry point is at the 0.5 Fibonacci level, then a stop loss can be placed slightly below 0.618 or 0.786. If your entry point is at 0.618, stop loss can be placed below 0.786 or 1 (the swing low).\u003C/p>\n\u003Ch2>Fibonacci extension\u003C/h2>\n\u003Cp>\u003Cstrong>Fibonacci extension\u003C/strong> levels are not used as much as retracements, but they are still worth examining. As opposed to Fibonacci retracement levels, which are spread between the swing low and swing high, \u003Cstrong>Fibonacci extension levels reach past the swing high or swing low\u003C/strong>.\u003C/p>\n\u003Cp>They are used to identify potential resistance levels exceeding the swing high or to identify support levels below the swing low. They are, however, much more speculative than the Fibonacci retracement levels. The most commonly used Fibonacci extension levels are \u003Cstrong>1.236\u003C/strong>, \u003Cstrong>1.382\u003C/strong>, \u003Cstrong>1.5\u003C/strong>, \u003Cstrong>1.618\u003C/strong> and \u003Cstrong>2.618\u003C/strong>.\u003C/p>\n\u003Cp>Fibonacci levels are a fairly useful trading tool with various usages. They can be used to identify support and resistance levels and also potential targets past new highs or lows. As is the case with other indicators, the use of Fibonacci retracement is highly subjective.\u003C/p>\n\u003Cp>That being said, many traders use Fibonacci retracement in combination with other indicators and technical signals, demonstrating its effectiveness when used correctly.\u003C/p>\n","full","left",{"text":17},[],[],"August 19th, 2022",{},{"title":32,"url":31,"geofencings":53},{},{"previous":55,"next":56},"/learn/crypto-trading/how-to-trade-cryptocurrency-derivatives-a-beginners-guide/","/learn/crypto-trading/how-to-use-perpetual-futures-in-crypto-trading/",{"ready":33,"sections":58,"disclaimer":253,"copyright":254},[59,102,130,153,190,209],{"title":60,"content":17,"items":61},"About",[62,67,72,77,82,87,92,97],{"noFollow":33,"isExternal":36,"name":63,"value":64,"isEmail":36,"isPhoneNumber":36,"isText":36,"showOnDesktop":33,"showOnMobile":33,"attachment":65,"geofencings":66},"Who We 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20 3868 9628","+442038689628",{},{},{"noFollow":36,"isExternal":36,"name":239,"value":240,"isEmail":36,"isPhoneNumber":33,"isText":36,"showOnDesktop":33,"showOnMobile":33,"attachment":241,"geofencings":242},"+1 800 712 5702","+18007125702",{},{},{"noFollow":36,"isExternal":36,"name":244,"value":245,"isEmail":36,"isPhoneNumber":33,"isText":36,"showOnDesktop":33,"showOnMobile":33,"attachment":246,"geofencings":247},"+352 20 88 10 96","+35220881096",{},{},{"noFollow":36,"isExternal":36,"name":249,"value":250,"isEmail":36,"isPhoneNumber":33,"isText":36,"showOnDesktop":33,"showOnMobile":33,"attachment":251,"geofencings":252},"+65 3105 1676","+6531051676",{},{},"\u003Cp>Please read the general \u003Ca href=\"/legal/risk-warning/\" target=\"_blank\" rel=\"noopener noreferrer nofollow\">Risk Warning\u003C/a>, and \u003Ca href=\"/legal/uk-investment-risk-warning/\" target=\"_blank\" rel=\"noopener noreferrer nofollow\">Risk Summary\u003C/a> for UK residents before investing in crypto-assets. \u003C/p>\n\u003Cp>Crypto-assets services are provided by the following Bitstamp legal entities depending on client residency: (1) Bitstamp Europe S.A., which is authorized by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg as a payment institution (licence number Z00000012) and crypto-asset service provider (licence number N00000003); Registered address: 40, avenue Monterey, L-2163 Luxembourg, Grand Duchy of Luxembourg; Registration number: B196856; (2) Bitstamp UK Ltd., which is registered with the Financial Conduct Authority (FCA) in the UK for the provision of certain cryptoassets activities under the Money Laundering Regulations (Firm Reference Number 978690); Registered address: 5 New Street Square, EC4A 3TW London, United Kingdom; Registration number: 14174243; (3) Bitstamp Ltd.with its registered address at 5 New Street Square, EC4A 3TW London, United Kingdom and registration number: 8157033; (4) Bitstamp Global Ltd., which is registered as a Virtual Asset Service Provider in the British Virgin Islands and is supervised by the British Virgin Islands Financial Services Commission (FSC); Registered address: Floor 4, Banco Popular Building, Road Town, Tortola VG1110, British Virgin Islands; Registered number: 2086429; and (5) Bitstamp Asia Pte Ltd, which is authorized by the Monetary Authority of Singapore (MAS) as a major payment institution (licence number PS20200667); Registered address: 63 Chulia Street, OCBC Centre East, #15-01, Singapore 049514; Registered number: 202016687K;\u003C/p>\n\u003Cp>Virtual currency services to US residents are provided by Bitstamp USA, Inc., which is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Licensed as a Money Transmitter by the New York State Department of Financial Services. Review a \u003Ca href=\"/legal/usa-inc/\" target=\"_blank\" rel=\"noopener noreferrer nofollow\">list of its licenses and other registrations\u003C/a> (NMLS number \u003Ca href=\"https://www.nmlsconsumeraccess.org/EntityDetails.aspx/COMPANY/1905429\" target=\"_blank\" rel=\"noopener noreferrer nofollow\">1905429\u003C/a>) for more information; Registered address: 85 Willow Road, Menlo Park, CA 94025, United States of America; Registered number: 5481543.\u003C/p>\n\u003Cp>Investment services with regards to trading in crypto derivatives are provided by Bitstamp Financial Services Ltd., which is authorized and supervised by the Slovenian Securities Market Agency (ATVP) as a MiFiD investment firm. Trading crypto derivatives carries significant risks and may result in substantial losses. Please trade responsibly and ensure you understand the associated risks. You can find more about the risks \u003Ca href=\"/legal/financial-services/general-terms-and-conditions/\" target=\"_blank\" rel=\"noopener noreferrer nofollow\">here\u003C/a>. To help you understand the risks involved we have put together a series of \u003Ca href=\"/derivatives/key-information-documents/\" target=\"_blank\" rel=\"noopener noreferrer\">Key Information Documents (KIDs)\u003C/a> highlighting the risks and rewards related to each derivatives contract. Crypto derivatives trading is not available to customers in the US, Canada, Japan and some other countries. Bitstamp Financial Services Ltd. does not provide crypto-asset services.\u003C/p>\n\u003Cp>To find out more about which Bitstamp entity you receive services from, please check the Profile/My information in your Bitstamp account. You can read more about our legal terms, policies and disclosures \u003Ca href=\"/legal/\" target=\"_blank\" rel=\"noopener noreferrer nofollow\">here\u003C/a>.\u003C/p>\n","\u003Cp>All rights reserved © 2026 Bitstamp by Robinhood. \u003Ca href=\"https://www.nmlsconsumeraccess.org/EntityDetails.aspx/COMPANY/1905429\" target=\"_blank\" rel=\"noopener noreferrer nofollow\">NMLS #1905429\u003C/a>\u003C/p>\n",{"description":7,"ogDescription":7,"ogImage":256,"twitterImage":256,"twitterSite":257,"twitterCreator":257,"twitterCard":258,"twitterTitle":6,"twitterDescription":7,"titleTemplate":259},"https://assets.bitstamp.net/msc/_ipx/enlarge_true&f_png&fit_cover&q_85&s_1200x630/bitstampImageUrl/1920x1080px_illustrations_learningcenter_58svg_b1c16f1c3a_5ea535b532.png","@Bitstamp","summary_large_image","%s",{"items":261,"ready":33,"platformButtonText":304,"backButtonText":305,"logInButtonText":306,"signUpButtonText":307},[262,266,270,273,276,279,282,287,290,295,300],{"headerName":263,"sidemenuName":134,"url":135,"noFollow":36,"showInHeader":33,"showInSidemenu":33,"geofencings":264,"submenu":265,"tag":17},"Institutions",{},[],{"headerName":126,"sidemenuName":126,"url":127,"noFollow":36,"showInHeader":33,"showInSidemenu":33,"geofencings":267,"submenu":268,"tag":269},{},[],"NEW",{"headerName":149,"sidemenuName":149,"url":150,"noFollow":36,"showInHeader":33,"showInSidemenu":33,"geofencings":271,"submenu":272,"tag":17},{},[],{"headerName":106,"sidemenuName":106,"url":107,"noFollow":36,"showInHeader":33,"showInSidemenu":33,"geofencings":274,"submenu":275,"tag":17},{},[],{"headerName":116,"sidemenuName":116,"url":117,"noFollow":36,"showInHeader":33,"showInSidemenu":33,"geofencings":277,"submenu":278,"tag":17},{},[],{"headerName":121,"sidemenuName":121,"url":122,"noFollow":36,"showInHeader":33,"showInSidemenu":33,"geofencings":280,"submenu":281,"tag":17},{"geofencing-uk":33},[],{"headerName":283,"sidemenuName":283,"url":284,"noFollow":36,"showInHeader":33,"showInSidemenu":33,"geofencings":285,"submenu":286,"tag":17},"Markets","/markets/",{},[],{"headerName":111,"sidemenuName":111,"url":112,"noFollow":36,"showInHeader":33,"showInSidemenu":33,"geofencings":288,"submenu":289,"tag":17},{},[],{"headerName":291,"sidemenuName":291,"url":292,"noFollow":36,"showInHeader":33,"showInSidemenu":33,"geofencings":293,"submenu":294,"tag":17},"Blog","https://blog.bitstamp.net/",{},[],{"headerName":296,"sidemenuName":296,"url":297,"noFollow":36,"showInHeader":33,"showInSidemenu":33,"geofencings":298,"submenu":299,"tag":17},"Learn","/learn/",{},[],{"headerName":301,"sidemenuName":301,"url":107,"noFollow":36,"showInHeader":36,"showInSidemenu":33,"geofencings":302,"submenu":303,"tag":17},"Get Bitstamp by Robinhood app",{},[],"Go to platform","Back","Log in","Get started",[309,313,317,321,325,327,331,335,339,343],{"title":310,"url":311,"geofencings":312},"Blockchain technology","/learn/blockchain/",{},{"title":314,"url":315,"geofencings":316},"Company profiles","/learn/company-profiles/",{},{"title":318,"url":319,"geofencings":320},"Crypto 101","/learn/crypto-101/",{},{"title":322,"url":323,"geofencings":324},"Crypto definitions","/learn/crypto-definitions/",{},{"title":32,"url":31,"geofencings":326},{},{"title":328,"url":329,"geofencings":330},"Cryptocurrency guide","/learn/cryptocurrency-guide/",{"geofencing-uk":33},{"title":332,"url":333,"geofencings":334},"People profiles","/learn/people-profiles/",{},{"title":336,"url":337,"geofencings":338},"Security","/learn/security/",{},{"title":340,"url":341,"geofencings":342},"Tutorials","/learn/bitstamp-tutorials/",{},{"title":344,"url":345,"geofencings":346},"Web3","/learn/web3/",{},1776263759107]