How to use the Fibonacci retracement calculator
- Enter the swing high and the swing low. These are the two ends of the move you want to measure. Pick a clear swing on the timeframe you trade.
- Choose the direction. In an uptrend the price rose from the low to the high, and the retracement measures a pullback down from the high. In a downtrend the price fell from the high to the low, and the retracement measures a bounce up from the low.
- Choose the levels. Retracements only shows the seven levels inside the swing. With extensions adds four more beyond the end of the swing, for targets.
- Add the current price if you want to know which zone it is in. The field is optional.
- Read the result. The golden zone comes first. The table gives the price of every level, the ladder draws them to scale with the key levels in colour, and the strip shows how much of the swing lies between each pair of levels.
The inputs stay in the address bar, so a link to your exact swing can go into a chat or a journal note.
The Fibonacci retracement formula
The range of the swing is the high minus the low. Each level is a ratio of that range, measured from one end:
range = swing high - swing low
Uptrend retracement: price = swing high - ratio × range
Downtrend retracement: price = swing low + ratio × range
Uptrend extension: price = swing low + ratio × range
Downtrend extension: price = swing high - ratio × range
Retracement ratios: 0, 0.236, 0.382, 0.5, 0.618, 0.786, 1
Extension ratios: 1.272, 1.618, 2, 2.618
Golden zone: between the 0.5 and 0.618 retracement prices
For a retracement, 0% is the end of the swing (the high of an uptrend, the low of a downtrend) and 100% is its start. A 38.2% retracement means the price has given back 38.2% of the swing.
Extensions are measured from the start of the swing, so 161.8% sits 61.8% of the swing beyond its end. In a downtrend a deep extension can land at or below zero, and the calculator leaves those levels out because a price cannot go there.
Worked example
A market rose from a swing low of 100 to a swing high of 200, a range of 100, and has now pulled back to 142. With the direction set to uptrend and retracements only, which is what the calculator opens with:
The golden zone, between the 50% and 61.8% levels, runs from 138.20 to 150.00. The current price of 142 is inside it, between the 61.8% level (3.80 away, 2.68%) and the 50% level (8.00 away, 5.63%). Switch to extensions and four more levels appear above the high, at 227.20, 261.80, 300.00 and 361.80.
Where the Fibonacci ratios come from
The Fibonacci sequence runs 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89. Divide a number by the next one and you get about 0.618 (21 ÷ 34). Divide it by the one two places on and you get about 0.382 (21 ÷ 55), and three places on, about 0.236 (21 ÷ 89). Those are the 61.8%, 38.2% and 23.6% levels.
The others are borrowed. The 50% level is not a Fibonacci ratio at all. It is the midpoint of the swing, and it is there because so many traders watch it. The 78.6% level is the square root of 0.618. Among the extensions, 127.2% is the square root of 1.618, 161.8% is the golden ratio itself, 200% is double the swing and 261.8% is 1.618 squared.
None of this gives the ratios any power over a market. They are conventions that traders adopted, and no known mechanism makes a price turn at them. One reason they seem to work is that so many people chart the same levels. Another is that the levels are dense: with seven of them across a swing, a pullback is often close to one. Keep that in mind when a chart looks convincing in hindsight.
How traders use retracement and extension levels
Retracements for entries. After a strong move, a trader waits for a pullback and looks for a reaction at a level, most often the 38.2%, 50% or 61.8% level. The 50% to 61.8% band is the golden zone. A deeper pullback, to 78.6%, is read as a weaker trend, and a move through 100% means the whole swing has been given back. Most traders drop the idea at that point.
Extensions for targets. Once the price moves back beyond the old high, the extension levels give targets for the next leg, most often 127.2% and 161.8%.
A note on extensions. This calculator projects the swing from its start. The three-point extension tool in many charting platforms measures the swing from the end of the pullback, and gives different prices. Check which one your chart uses before you compare numbers.
Confluence, stops and position size
A Fibonacci level is a weak reason on its own. Traders look for confluence, where a level lines up with something else: a previous high or low, a round number, a moving average, a trend line or a pivot point. Two or three reasons in the same place make a better zone than one.
The levels also help plan the exit. A stop loss belongs beyond the point where the idea is wrong, such as below the next level or beyond the swing, and the target can be the swing high or an extension. With the example swing, a trade that enters at each level, stops at the swing low and targets the swing high looks like this:
A stop right on the swing low is a simplification. In practice it goes a little beyond. A deeper entry has a better reward to risk, but it needs a deeper pullback, and a deeper pullback can mean the trend is failing. The ratio does not give you the odds. Put your own entry, stop and target into the risk reward ratio calculator, and size the trade from the stop with the position size calculator, so that a failed level costs an amount you chose in advance.
Common Fibonacci retracement mistakes
- Choosing the swing after the fact. Redrawing the swing until a level fits the price is hindsight. Decide the swing by a rule before the pullback.
- Mixing scales. The same chart has levels from a small swing and from a large one. Pick the scale you trade on and stay with it.
- Treating 61.8% as a guaranteed reversal. No level guarantees one. Prices run through levels, stop short of them and ignore them.
- Drawing the swing the wrong way round. Swapping the direction mirrors the levels. Check that 0% sits at the end of the move you are measuring.
- Using an extension as an exact target. Extensions are zones. Leave room for the price to fall short of one.
- Placing a stop at a round distance. Set it from the structure, then size the position to fit it.
What the calculator does not know
The calculator applies the ratios to the two numbers you type. It does not know which swing matters, whether you measure from wicks or from closes, or where the market is in its trend. It does not know whether a level will hold. The ratios are conventions, and no level guarantees a reversal. Platforms also differ on extensions, as described above. Treat the levels as places to plan a trade, never as signals to take one. Nothing here is investment advice.
Frequently asked questions
What are the Fibonacci retracement levels?
The standard levels are 23.6%, 38.2%, 50%, 61.8% and 78.6%, with 0% and 100% at the two ends of the swing. Traders watch 38.2%, 50% and 61.8% most. Extension levels, such as 127.2%, 161.8% and 261.8%, lie beyond the swing.
How do you calculate Fibonacci retracement levels?
Subtract the swing low from the swing high to get the range. In an uptrend, each level is the swing high minus the ratio times the range. For a swing from 100 to 200, the 61.8% level is 200 − 0.618 × 100 = 138.20. In a downtrend, add the ratio times the range to the swing low instead.
What is the golden zone in Fibonacci?
The golden zone is the stretch between the 50% and 61.8% retracement levels, where many traders look for a pullback to end. For the swing from 100 to 200 it runs from 138.20 to 150.00. Definitions vary between traders, so check how your source draws it.
How do you draw Fibonacci retracement in an uptrend and a downtrend?
In an uptrend the swing runs from the low to the high, so 0% belongs at the high. In a downtrend it runs from the high to the low, so 0% belongs at the low. Check where your charting tool puts 0% when you draw it. The calculator follows this layout when you choose the direction.
What is the difference between Fibonacci retracement and extension?
A retracement measures how far a pullback goes back into the swing, and it is used to find entries. An extension projects the swing beyond its end, and it is used to find targets. Retracements lie between the swing high and low, and extensions lie outside them.
Is 50% a real Fibonacci level?
No, it is not a Fibonacci ratio. It is the midpoint of the swing, and traders include it because many of them watch it. The 38.2%, 61.8% and 23.6% levels come from the Fibonacci sequence.
Which Fibonacci level is the most reliable?
None is reliable in the sense of guaranteed. The 38.2%, 50% and 61.8% levels are the most watched, and a level matters more when it lines up with other reasons. To judge a level for yourself, record your trades at it and compare the results with your other trades.
Do Fibonacci retracements work?
They work as shared reference points, but price can pass through any level or turn short of it. There is no known reason a market should turn at these ratios, and the levels are close together, so a pullback often ends near one. Treat them as part of a plan with a stop, not as a promise.
How do I set a stop with Fibonacci levels?
Put it beyond the point where the idea is wrong, for example below the next level or below the swing low for a long. Then size the position from the stop so the loss is the amount you chose. Do not place the stop exactly on a level, since prices often poke through one before turning.