Fibonacci Number and Ratio Analysis
Figure 10.25 Downside Extension on the Daily EURUSD.
Source: MetaTrader 4Figure 10.26 Upside Extension on the Daily EURUSD.
Courtesy of Stockcharts.comas 27.2 percent if we selected the peak, instead of the trough, as the base for the
extension of the observed price range. We shall therefore, by convention, use the
trough as the base for calculating all upside extensions and the peak as a base for
calculating all downside extension levels.
Assume that the significant peak and trough of an observed retracement range
are point A and point B, respectively. Assume that the peak at point A is at the
price level of $115 and that the trough at point B is at $85. Refer to Figure 10.24
as a visualization guide.