If retracements tell you where a pullback might end, Fibonacci extensions tell you where the next leg might go. They project levels beyond the original move — 1.272, 1.618 (the most important), 2.0, 2.618 — giving you objective targets for a continuing trend rather than guessing.
How they work
Extensions are measured using three points: the start of a move, its end, and the retracement low (or high). The tool then projects the Fibonacci ratios beyond the move's end. The 1.618 extension — the 'golden ratio' — is the most-watched target, the level where many traders expect a trend leg to reach and potentially stall.
Where they shine
Extensions are most useful for setting profit targets and judging risk:reward before you enter. If your entry is at a 0.618 retracement and the 1.618 extension sits far above, the trade offers a strong reward relative to a stop just below your entry. They also help you stay in winners — knowing the next extension level gives a logical place to take partial profit rather than exiting on emotion.
Combine, don't isolate
As with retracements, an extension is a probabilistic objective, not a guarantee — price routinely overshoots or falls short. The best targets are extensions that coincide with an independent level (a prior high, a round number, a higher-timeframe zone). When the projection and a real level agree, the target is far more credible. Extensions plus the measured moves from the patterns module give you two independent ways to estimate where a move can run.