Retracements help you get in. Extensions help you get out.
The extension tool uses three points: A (start of the move), B (end of the move) and C (end of the pullback). It projects where the next leg might reach.
Common targets
- 61.8% of the A–B move, measured from C: a conservative first target.
- 100%: the next leg equals the first. Very common.
- 161.8%: the golden extension for strong trends.
Pro tip
Many traders take half the position off at 100% and let the rest run toward 161.8% with a trailing stop.
Wick says
Extensions answer the question every trader asks: "How far can this thing go?" Not with certainty, but with a plan.
Key takeaways
- Extensions use three points: A, B, C.
- 100% and 161.8% are the most popular targets.
- Use targets to plan exits before you enter.